Automakers are expected to report subdued performance in the monthly sales data which is expected on June 1, amid continuing lockdowns in many states.
Carmakers were forced to halt production and curtail the spread of infection within factories. They had to take this step to prevent further building up of inventory in the system with showrooms downing their shutters too.
Sales in May are estimated to have fallen to less than a third of the monthly average since January this year, according to market watchers. This translates to wholesale sales of 100,000-110,000 passenger vehicle units for May, only 30 percent of an average of 300,000 units clocked between January and April.
Many automakers had advanced their maintenance shutdown by a month to May, when only 15-20 percent of showrooms were open. Automakers had to work with lower number of workers while simultaneously dealing with Covid-19 cases.
Some companies like Maruti Suzuki and Hero MotoCorp extended their plant shutdown while others like Renault, Royal Enfield, Hyundai and Ford were forced to halt production following worker agitation for a few days. Semiconductor shortage and high absenteeism also impacted output during May, said automakers.
With half of April and almost the whole of May blacked out, the industry is staring down the barrel for Q1 FY2022 with supply chain disruptions expected to continue over the next couple of months.
While June and July sales could see “wholesales slowly improving”, the real uptick could happen only around September-October. This is when the impact of the monsoon will actually be felt along with the buoyancy of the festive season.
For now, the industry will be hoping that there will be no third wave of the pandemic to contend with — this round has already knocked the wind out of their sails.