Posted on 28 Jun 2021
Major Indian carmakers advanced maintenance shutdowns to May, suspending output for 10-14 days, amid lockdowns and weaker sentiment, but production plants are gradually reopening in June, which should see on-month output growth, says India Ratings & Research (Ind-Ra).
Indian automotive output excluding commercial vehicles dropped 57% on-month in May. Three-wheeler production was 73% of April levels, as the steep decline in domestic demand was partly offset by somewhat stable export demand, which declined by just 4%.
The widespread and severe business impact of the second Covid-19 wave in May led to further deterioration in sales. The majority of dealerships either closed or limited their operations, limiting clearance of existing inventory.
“Ind-Ra expects sales for June to witness healthy growth compared to May 2021, aided by the pent-up demand with the gradual lifting of localised lockdown restrictions along with reopening of manufacturing facilities of OEMs and a steady decline in daily new Covid cases,” the credit rating agency says in a note seen by Kallanish.
Source:Kallanish
