Coronavirus Adds To India’s Auto Slowdown As Sales Slump Further In February

Sales of cars and utility vehicles continued to decline in February as India’s worst auto slowdown in almost two decades showed no signs of recovery.

Domestic sales of passenger vehicles tumbled 7.61 percent year-on-year to 251,516 units in February, according to data released by industry body Society of Indian Automobile Manufacturers.

SIAM President Rajan Wadhera said the decline in wholesale dispatches is primarily due to economic slowdown and lowered production of BS-IV vehicles. He said that some upside on retail sales—measured by vehicle registrations at dealerships—can be attributed to last-minute purchases of BS-IV vehicles.

Auto and auto component makers, which together contribute more than 7 percent to India’s gross domestic product, have been forced to lay off contract workers, and dealerships shut showrooms, as Indians cut back spending amid an economic slump. The slowing consumption has dragged India’s GDP growth rate to the lowest in more than a decade.

The novel coronavirus outbreak has added to the woes and is seen affecting footfalls at dealerships and production of Bharat stage VI-compliant vehicles in the coming weeks. “Supply chain disruption from China is also a concern, which may impact the production plans for companies going forward,” Wadhera said.

Also Read: Retail Sales In February Point To Automakers Paring BS-IV Inventory

SIAM had earlier estimated that a disruption in availability of raw material from China is likely to critically hamper production across all segments and gravely affect electric vehicles.