Steep BS-IV production cuts push auto sales down in February

The pain in medium and heavy commercial vehicles (M&HCVs) was persistent in February as well, with domestic sales of goods carriers in the M&HCVs segment falling 46.78 percent.

Automakers have also had to put the brakes on manufacturing BS-IV commercial vehicles which are delivered as cowl chassis, as the bodybuilding process for such vehicles may exceed the April 1, 2020 deadline for the implementation of BS-VI regulations.

In the passenger vehicle segment, the utility vehicle sub-segment showed a flat trend, growing 0.10 percent in February, while sales of smaller cars, including hatchbacks and sedans, fell 8.77 percent.

The data contrasts with retail sales figures for February which showed a positive trend across segments, barring passenger vehicles. "Automobile industry continues to face hardship due to steeper decline in production and wholesale dispatches in all segments in February 2020," Rajesh Menon, director general, SIAM said in an official statement.

SIAM also attributed the decline in wholesale volumes to supply chain disruptions from China in the light of the COVID-19 outbreak. Now that the virus has spread across East Asia and Europe as well – areas which serve as important supply hubs for auto components – the industry has raised concerns over a delayed ramp-up of BS-VI production going forward.

Weak economic conditions coupled with a winding-down of BS-IV production led to the decline in wholesale dispatches in February, according to Rajan Wadhera, president of SIAM.