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With very low sales last month, auto sales may hit record low

Industry estimates and numbers released by key auto companies showed vehicle sales at 37,000 in May, an 85 per cent fall from a year earlier. In April, production as well as dispatches had come to a complete halt. Mahindra & Mahindra and MG Motor did a little better than peers with May sales constituting a higher percentage of the February 2020 numbers.

ET Bureau|
Last Updated: Jun 02, 2020, 06.48 AM IST
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Market sentiment is expected to remain tepid for the next couple of months, with some recovery expected near festive season.
New Delhi | Mumbai: Auto companies eked out marginal sales in May, with lockdown due to Covid-19 and economic gloom ensuring overall sales hit a decade low.

Industry estimates and numbers released by key auto companies showed vehicle sales at 37,000 in May, an 85 per cent fall from a year earlier. In April, production as well as dispatches had come to a complete halt.

Mahindra & Mahindra and MG Motor did a little better than peers with May sales constituting a higher percentage of the February 2020 numbers. Mahindra’s May numbers were 35.4 per cent of the February numbers though year-on-year sales fell 81 per cent to 3,867 units. MG Motor’s May sales were 52 per cent of February sales on a low base. Maruti’s May numbers, down 89 per cent year on year at 13,865 units, were 10.3 per cent of February sales. Hyundai’s May sales were 17.2 per cent of the February numbers though year-on-year performance saw a whopping 84 per cent drop.

Tractor sales did very well with Mahindra tractors posting a 2 per cent year-on-year growth at 24,017, a 9.8 per cent increase over February.

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Hemant Sikka, president (farm equipment sector) at M&M, said, “Timely relaxation of the lockdown for the agricultural sector helped ensure the speedy recovery of tractor demand during May. In the near term, farmer sentiment is likely to remain positive due to several developments including robust rabi crop production, higher procurement, good price realisations and the forecast of a normal monsoon that bodes well for a good kharif crop.”

Escorts sold 6,454 tractors against 6,488 in May last year.

Retail sales last month fared better than wholesale numbers, claimed several manufacturers, helping align inventory in the channel. Market sentiment is expected to remain tepid for the next couple of months, with some recovery expected near festive season.

Automakers in India report wholesale dispatches from factories, and not retail sales made to customers. By the end of May, about half the retail outlets and 80 per cent of workshops had reopened.

“The response for new sales is very low as of now although fresh bookings have started,” Federation of Automotive Dealers Association president Ashish Kale said. Most of the deliveries happening now are of vehicles booked before the lockdown, while new demand is mostly for cars and small commercial vehicles (SCVs), followed by two-wheelers, he said.
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