Maruti, Mahindra, Hero and others saw a slight recovery in June sales but the numbers are far from good

• India’s largest carmaker, Maruti Suzuki sales were down nearly 54% in June amid supply-chain constraints
• The good Rabi-crop procurement, early monsoon leading to better Kharif sowing and farm labour shortage helped Escorts sales.
• The situation still remains grim for other three-wheelers and four-wheelers companies.
• Analysts at Nirmal Bang said the pressure would continue on commercial vehicles as it is one of the worst-affected segments due to “excess capacity and limited drive availability.”

India’s largest carmaker, Maruti Suzuki sales were down nearly 54% in June amid supply-chain constraints— this is still better than what it experienced in the past two months due to coronavirus lockdown.

The sales number is very much in line with the earlier estimate of -56% given by Nirmal Bang, a broking firm.

At the same time, Escorts saw nearly a 21% growth in its June sales after good Rabi-crop procurement, early monsoon leading to better Kharif sowing and farm labour shortage. However, its rival Mahindra and Mahindra saw a 55% decline in overall sales, despite a 12% growth in its farm equipment sector.

Escorts said it has opened up most of its factories in multiple shifts to achieve production at about 90% of the capacity in June. However, it said the supply chain situation is better than before but is still volatile.

The situation still remains grim for other three-wheelers and four-wheelers manufacturers. Analysts at Nirmal Bang said the pressure would continue on commercial vehicles as it is one of the worst-affected segments due to “excess capacity and limited drive availability.”

However, the analysts expect the two-wheeler segment to see sharper recovery due to the strong rural sentiments and rise in preference for personal mobility to follow social distancing norms. It also said the retail demand is expected to witness higher demand, especially in non-metro cities and rural areas, which are said to be less impacted by the coronavirus.


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