The coronavirus pandemic has pushed India's passenger vehicle sales to their lowest in six years, annual data from an auto industry body showed on Monday, with the sector bracing for further fallout from a recent surge in cases.
India on Monday overtook Brazil to become the second-worst affected country globally, with daily COVID-19 infections soaring and fewer than 4% of its population of 1.4 billion people estimated to have been vaccinated.
The Indian auto sector was already facing a "deep structural slowdown" even before the pandemic and together this has pushed back sales by many years, Kenichi Ayukawa, president of the Society of Indian Automobile Manufacturers (SIAM), said.
"Recovery from here will require time and efforts, by all stakeholders," said Ayukawa, who is also managing director of Maruti Suzuki, India's biggest carmaker by sales.
Passenger vehicle sales fell 2.24% in the fiscal year ended March 31, 2021 to 2.71 million, with automakers such as Ford Motor and Volkswagen reporting falls of over 20% compared with an 8.5% drop for domestic rival Maruti, which sells one in every two cars in India, data from SIAM showed.
That was offset by higher sales from new entrants such as Kia Motors and SAIC Motor's British brand MG Motors, as well as local rival Tata Motors.
Sales of trucks, a barometer of economic activity, tumbled 21% to an 11-year low, while motorcycle and scooter sales fell 13% to their lowest level in seven years, the data showed.
The auto industry is working to maximise production and sales, but supply chain disruptions and the second wave of infections is making it hard to predict the future, Ayukawa said.
In some states like Maharashtra, home to the financial capital Mumbai and one of India's largest auto manufacturing hubs, the government has already imposed limitations like a night curfew to curb the virus' spread.
Fears of a total lockdown, similar to the one in 2020, are worrying investors.
The Nifty auto index closed down 5.11% on Monday, while the broader market ended 3.5% lower. Tata Motors shares fell 10%, while Mahindra & Mahindra and Maruti Suzuki both ended about 5% down.
Before the second wave, the auto sector had been seeing a recovery in sales, despite challenges such as a shortage of semiconductors and higher raw material costs.
Domestic passenger vehicles sales in March crossed 290,000 compared with 281,000 in February and 276,000 in January, SIAM data showed.