Auto Sales In July 2020: Maruti Suzuki, Hero MotoCorp Lead Crawl Back To Normalcy

The big boys of India's auto industry are leading a post-pandemic resurgence in sales for the sector, amid an easing coronavirus lockdown.

Sales of Maruti Suzuki India Ltd. and Hero MotoCorp Ltd. in July 2020 returned to levels seen a year ago. The Swift maker sold 1,08,064 units—a sequential growth of 88.2% and annual decline of 1.1%. At 5,14,509 two-wheelers, the Splendor maker sold 14% more over the previous month and 5% less from a year ago.

Performance of their ilk met analyst expectations—declining anywhere between 3% and 71% year-on-year but surging on a monthly basis.

Tractors, as expected, were the outlier. Mahindra and Mahindra Ltd. sold more tractors than sports utility vehicles for a third straight month, but the company's auto division—comprising passenger and commercial vehicles—made up lost ground.

Here's a look at the auto sales in July 2020, as reported by the companies, in sequential as well as year-on-year terms.

Maruti Suzuki India Ltd. sold 108,064 units in July 2020—that’s a growth of 88.2% over June 2020 and a fall of 1.1% over July 2019.

The sales figure includes domestic sales of 100,000 units and 1,307 units for other original equipment manufacturers in the local market. The company also exported 6,757 units in July 2020.

The sales performance signals a better second quarter for Maruti Suzuki after its first quarterly loss since listing in the April-June period. India’s largest carmaker recorded a loss of Rs 249.5 crore compared with a profit of Rs 1,435.5 crore a year ago.

But the company is witnessing an increase in first-time buyers, Executive Director (Sales and Marketing) Shashank Srivastava said in a post-earnings call on July 29, as people are choosing personal mobility over public transport to reduce risk of infection.

Hyundai Motor India Pvt. Ltd. sold 41,300 units in July 2020—that’s a growth of 53.98% over June 2020 and decline of 28% over July 2019.

The Indian arm of the South Korean carmaker sold 38,200 units in the local market last month and exported 3,100 vehicles. Sales were driven by the all-new Creta SUV, Venue and the new Verna sedan, besides compact cars Elite i10 and Nios.

"With the changing trend of preference for personal mobility, our consistent efforts are towards fulfilling the customer needs and meeting the market demand," Tarun Garg, director (sales, marketing and service) at Hyundai India, said in a statement.

Toyota Kirloskar Motor Pvt. Ltd. sold 5,386 units in July, indicating a sequential growth of 39.31% and an annual decline of 48.32%. The company had sold 3,866 units in June 2020 and 10,423 units in July 2019.

"Despite various challenges, the month of July witnessed better sales in terms of both retail and wholesales when compared to June," Naveen Soni, senior vice president (sales and service) at Toyota Kirloskar, said in a statement.

Since the coronavirus lockdown started easing, Toyota's retail sales have been “very good” due to pending orders getting cleared and pent-up demand, Soni said. However, localised stay-at-home curbs in several pockets of the country “led us to a situation wherein our business was closed up to 20% of the market, in and around mid July”.

Also Read: Toyota To Launch Its Version Of Maruti Suzuki Vitara Brezza In 2020

The lockdown called upon Bengaluru forced Toyota to shut its plant for four days last month, resulting in some production loss. "We intend to catch up on both retail and wholesale, beginning the festive month of August,” Soni said.

MG Motor India Pvt. Ltd. sold 2,105 units in July 2020—indicating a sequential growth of 4.62% and an annual growth of 40%. The carmaker had sold 2,012 units in June 2020 and 1,508 units in July 2019.

"The overall market environment continues to be challenging with uncertainties due to variable lockdowns in various phases,” Rakesh Sidana, national sales head at MG Motor India, said in a statement. “The component supplies continue to remain impacted, especially from the Chennai region.”

Despite these challenges, production remained at similar levels in July as compared to June 2020. The company expects the situation to improve during the festive season, Sidana said.

The India arm of Fiat Chrysler Automobiles N.V. is recalling 547 units of MY20 Jeep Compass to rectify fitment of a ‘brace nut’ used in the car’s wiper assembly.

The affected vehicles were all manufactured in 2020, the company said. The glitch was spotted during a regular vehicle quality audit process.

“The torque induced brace nut should firmly clamp the wiper arm on to the wiper pivot assembly, enabling them to swivel as one unit when activated,” FCA India Automobiles Pvt. Ltd. said in a statement. “A malfunction of the brace nut can result in the wipers not swivelling when activated by the wiper combi-switch behind the steering wheel.” Increased tightening of the brace nut would improve its grip on the wiper pivot, ruling out the probability of a malfunction.

The recall is precautionary in nature but necessary for consistent wiper function in the vehicle, the company said. “FCA India is unaware of any MY20 Jeep Compass customer reporting of a malfunction of this nature,” it said.

Also Read: How Jeep Wrangler, Ford Bronco, and Land Rover Defender Stack Up

The affected MY20 Jeep Compass customers are being informed about the recall, FCA India said, adding that the fix will be done en masse at its authorised dealerships. “The tightening of the brace nut will take no more than 15 minutes and will be at no cost to customers,” it said.

Mahindra and Mahindra Ltd. sold 25,402 tractors in July 2020—indicating a sequential decline of 30.48% and annual growth of 27.06%. The farm equipment maker had sold 36,544 units in June 2020 and 19,992 units in July 2019.

Domestic sales in July 2020 were at 24,463 units, as against 19,174 units in the year ago period. Exports for the month stood at 939 units.

“These are our highest ever July sales. The strong demand momentum (in rural areas) continued...,” Hemant Sikka, president-farm equipment sector at Mahindra, said in a statement Saturday. “Localized lockdowns in certain states and covid-related impact on specific suppliers led to supply side challenges during the month."

Sikka expects sentiment to remain buoyant going ahead, translating into robust tractor demand in the coming months. “In the exports market, we have sold 939 tractors, a growth of 15% over last year,” he said.

Mahindra and Mahindra Ltd. sold 25,678 units of commercial and passenger vehicles in July 2020—indicating a month-on-month growth of 32.64% and decline of 36.03% on year-on-year basis. The company’s automotive division had sold 19,358 vehicles in June 2020 and 40,142 vehicles in July 2019.

• Passenger vehicle sales fell 34.49% year-on-year to 11,025 units.
• Commercial vehicle sales fell 17.94% year-on-year to 13,103 units.
• Exports for the month of July 2020 were at 1,467 vehicles.

“At Mahindra, we are happy to see a growing trend in our overall vehicle sales, buoyed by the continuing revival in demand, primarily in rural and semi urban India,” Veejay Nakra, chief executive officer of Mahindra’s automotive division said in a statement. “As we ramp up production, the biggest challenge is on the supply side and working around these challenges is our top priority.”

Sales of Hero MotoCorp Ltd. are back at levels seen a year ago, underscoring a sharp rebound in two-wheeler demand in the aftermath of the coronavirus lockdown.

India’s largest two-wheeler maker sold 514,509 motorycles and scooters in July 2020—indicating a sequential growth of 14%. Wholesale dispatches reached more than 95% of July 2019 numbers, thanks to “strong retail sales due to the positive market demand”.

• Motorcycle sales fell 2.37% year-on-year to 478,666 units.
• Scooter sales fell 21.65% year-on-year to 35,843 units.
• Two-wheeler exports fell 69.04% year-on-year 7,563 units.

To be sure, Hero MotoCorp still maintains “cautious optimism” on demand trajectory going forward, as sales continue to be impacted by the micro-lockdowns in several parts of the country.

Production continues to ramped up at the company's eight manufacturing facilities—six in India and two abroad. More than 95% customer touchpoints are also operational, with strict safety measures and protocols in place.

Also Read: Ather Energy Gets Fresh Funding From Hero MotoCorp

Sales of Suzuki Motorcycle India Pvt. Ltd. rose 37% sequentially to 31,421 units in July 2020. Exports stood at 2,991 units in the month gone by.

“With the unlock phase, the automobile industry is now marching towards normalcy in terms of production, distribution and sales while continuing to adhere to all the precautionary measures,” Koichiro Hirao, managing director at Suzuki Motorcycle India, said in a statement on Saturday. “From August 2020, we will try our best to achieve Pre-Covid-19 production and sales volume.”

Royal Enfield sold 40,334 motorycles in July 2020—indicating a sequential growth of 5.96% and a decline of 25.56% from the year-ago period. The two-wheeler arm of Eicher Motors Ltd. had sold 38,065 units in June 2020 and 54,185 units in July 2019.

• Sales of upto 350cc motorcycles fell 19% year-on-year to 36,384 units.
• Sales of 350cc+ motorcycles fell 57% year-on-year to 3,950 units.
• Exports fell 52% year-on-year to 2,409 units.

Still, Royal Enfield claimed that its Interceptor 650 was the highest-selling motorcycle in the U.K. over the past 12 months, with the Himalayan coming in at fourth.

Eicher Motors expects increased demand for two-wheelers in the aftermath of the pandemic, as people are likely to shun public transport due to fear of infection.

Royal Enfield is witnessing a strong initial customer interest with the gradual easing of the lockdown, Eicher Motors' Managing Director Siddhartha Lal said in the company's annual report for 2019-20. "We estimate increased demand for personal transport and two-wheelers as people would be wary of using public transport. This we believe will augur well for us and for the industry as a whole," Lal said.

Also Read: Royal Enfield Has No Plans To Hold Back Long-Term Investments

Royal Enfield, he said, continues to make concrete inroads to expand its retail network, while further strengthening its supply chain and vendor ecosystem.

Total sales of Ashok Leyland Ltd. fell 56% year-on-year to 4,775 units in July 2020 from 10,926 units a year ago, according to an exchange filing on Saturday.

• Truck sales fell 70% year-on-year to 1,461 units.
• Bus sales fell 87% year-on-year to 244 units.
• Light CV sales fell 27% year-on-year to 3,070 units.

The company exported 493 commercial vehicles in the previous month.

TVS Motor Co. Ltd. sold 2,52,744 units in July 2020—indicating a sequential growth of 27.46% and decline of 9.56% from the year-ago period. The Chennai-based automaker had sold 1,98,387 units in June 2020 and 2,79,465 units in July 2019.

• Total two-wheeler sales fell 8% year-on-year to 2,43,788 units.
• Total exports fell 10.86% year-on-year to 62,389 units.
• Domestic two-wheeler sales fell 9% year-on-year to 1,89,647 units.
• Two-wheeler exports fell 5.33% year-on-year to 54,141 units.
• Three-wheeler sales fell 35.03% year-on-year to 8,956 units.

The company sold a total of 1,06,062 motorcycles and 78,603 scooters last month.

Sales of Bajaj Auto Ltd. fell 8% sequentially and 33% from a year ago to 2,55,832 units in July 2020, according to a regulatory filing on Monday. The Chakan, Pune-based automaker had sold 2,78,097 units in June 2020 and 3,81,530 units in July 2019.

• Domestic sales fell 23% year-on-year to 1,58,976 units.
• Total motorcycle sales fell 26% year-on-year to 3,22,210 units.
• Total commercial vehicle sales fell 71% year-on-year to 17,276 units.
• Exports declined 45% from the year ago to 96,856 units in July 2020.

The July sales data comes days after the Rajiv Bajaj-led company reported its results for the first quarter of 2020-21.