Domestic wholesale of passenger vehicles fell by 49.59% year-on-year to 1,05,617 units in June as demand for vehicles fell significantly due to the economic slowdown. Automakers are struggling to ramp up manufacturing operations due to disruption in the supply chain, according to data released by the Society of Indian Automobile Manufacturers (Siam) on Tuesday.
Factory dispatches of passenger cars during the period declined by 57.98% y-o-y to 55,497 units, while the same for utility vehicles dropped by 31.16% y-o-y to 46,201 units.
Automobile sales in India are counted as factory dispatches and not retail sales.
With retail sales picking up after the removal of the lockdown in May, most manufacturers are trying to ramp up production according to the demand. Factors like rising cases of covid-19 and lack of availability of manpower have limited the ability of auto makers to increase production of vehicles.
The covid-19 crisis has added to the woes of India’s auto sector, which has been battling headwinds like a liquidity squeeze and decline in consumption demand over the last year and half, which has impacted sales across categories.
According to Rajan Wadhera, president, Siam, the automobile industry will take another 3-4 years to reach the 2018 level of vehicle sales without any demand stimulus from the government and profitability of most companies are under pressure sine most of them invested significantly for transition to Bharat Stage VI emission norms.