#LockdownEffect: Maruti Suzuki reports zero sales for April
What's the story
When India went into lockdown to prevent the spread of COVID-19, the worst health crisis of our time, we all knew a major economic crisis was on its way. Now, as we move towards the start of the third phase of the lockdown, the grim impact of the shutdown is beginning to appear, with Maruti Suzuki, the country's biggest automaker, being worst-hit.
Sales
Not a single unit sold in domestic market
In a regulatory filing on Friday, May 1, Maruti Suzuki India (MSI) reported sales for April and confirmed that it did not sell even a single car in India throughout the month. This is the first time ever that the automaker has posted zero sales for a month in the domestic market, where it has been operating since 1981.
Details
Not even OEM sales were made
In addition to nil passenger vehicle sales, Maruti Suzuki also reported zero sales to original equipment manufacturers (OEMs). However, amid all this, the company did manage to export 632 units from Mundra port. These vehicles, MSI said, were shipped after port operations were resumed, in compliance with the safety guidelines laid down by the government.
Comment
All production facilities were closed
Maruti Suzuki clarified in the filing that all "this was because [it was] in compliance with the government's orders [and] all production facilities were closed". Notably, the Gurugram district administration had last month allowed the company to restart its plant in Manesar with a maximum of 4,696 workers, but the company said it would open only when it could maintain continuous production and sales.
Quote
Here's what MSI chairman said in response to Gurugram's permit
"We will start operations whenever we can maintain continuous production and sell it (vehicles), which is not possible at this point of time," Maruti Suzuki India Chairman RC Bhargava had told PTI, following Gurugram's permission.
Imapct
Auto industry was already slowing down
The current situation shows how coronavirus-triggered lockdown has crushed the demand in the auto sector, which was already reeling from declining sales, production cuts. According to the Society of Indian Automobile Manufacturers, due to subdued demand and COVID-19, domestic passenger vehicle sales dropped 51% in March 2020, which was one of the sharpest declines seen for the month. SIAM's April figures are still awaited.