Commercial vehicle sales lag as coronavirus outbreak pulls down economy

Commercial Vehicle (CVs) continue to do worst in overall auto sales as the coronavirus outbreak pulls down the economy and customers wait out to see the impact of new vehicular emission norms, said industry leaders.


Medium and Heavy Commercial Vehicles (M&HCV) volumes dropped nearly 92 per cent YoY during the first quarter of Financial Year 2020-21 and Light Commercial Vehicles (LCV) volumes plunged 87 per cent YoY.


Tata Motors, India’s largest CV maker, said domestic volume in the first quarter of the financial year dropped nearly 90 per cent to 9,274 units from 94,934 units during the same period last year. The company did not share monthly volumes.


Girish Wagh, president of Commercial Vehicles Business Unit at Tata Motors, said the company’s first quarter was marked by successful transition to Bharat Stage (BS) VI norms for emissions.


Tata Motors plants started operations late May, when India started easing a lockdown to contain the coronavirus, and ramped up production gradually, said Wagh. Retail sale was 67 per cent behind wholesale.


“There are early recovery signs in a few sectors, and we look forward to a gradual pickup in demand on the back of overall economic recovery, while we continue to address the challenges of intermittent demand and supply disruptions from COVID-19,” he said, referring to the disease caused in the pandemic.


M&HCV sales for Ashok Leyland, which is India’s second largest company in this space, dropped by 93 per cent in June to 572 units from 7,780 units, a year ago. 


Vipin Sondhi, Managing Director and Chief Executive Officer at Ashok Leyland, recently said that opening up of the economy is a stimulus for the industry. The company's factories are open and most suppliers have resumed business, said Sondhi.


CV sales for Mahindra & Mahindra (M&M) dropped by 70 per cent to 15,587 units during the quarter ended June from 51,594 units, a year ago. June sales dropped by 36 per cent to 10,417 units from 16,394 units, a year ago.


Veejay Nakra, Chief Executive Officer of Automotive Division at M&M, said the industry has started to see recovery in passenger and small commercial vehicle segments. 


This has been led primarily by rising rural demand and movement of essential goods across the country. Managing the supply chain will be our key focus area as we ramp up production to meet this increased demand, he said.


Bajaj reported 94 per cent drop in domestic commercial vehicle sales to 5,282 units from 86,217 units, a year ago. Eicher Trucks & Buses domestic volume down by 87.9 per cent to 1,484 units from 12,245 units, a year ago. Volvo trucks sales dropped by 65.5 per cent to 68 units from 197 units.