While the total productivity improvement of the auto industry is the cause of cheer, but nobody is celebrating yet. With coronavirus, the cases are still increasing, and the state of the economy is lavishly uncertain, that may be premature for the future.
It’s barely a day after India reported the worst economic performance in its first quarter, the automobile sector showed signs of strong revival with 20 per cent growth in passenger vehicles in August over the year-ago period.
The numbers were a low base of the previous year when industry volumes had declined by a massive 31.6 per cent, which was then a record fall for a month. Yet, it builds on a rebound that has been visible in the months of June and July as well.
Market leader Maruti Suzuki reported a 21.3 per cent growth in sales and breached the 100,000 unit for the first time since February, which is also the last non-COVID month.
According to percentage terms, this was Maruti’s best month since June 2018. Hyundai matched the Japanese car major’s performance with a 20 per cent increase in dispatches at 45,809 units in August 2020.
In relative terms, Hyundai’s performance was even better as it was its highest tally in a month since October 2019.
The showstopper was the Tata Motors which jumped its production by new launches like Harrier SUV and Altroz premium hatchback, which witnessed a 154 per cent jump in sales.
The improved performance signals a stabilisation of production, which was disrupted due to the lockdown. It also builds an inventory in the run-up to the festive season that is going to start next month. Out of the top three manufacturers; however, the going is still not silky smooth.
While the improved performance of the industry is a cause for cheer, but nobody is popping the champagne bottle yet.
With coronavirus cases still rising and the state of the economy is highly uncertain, that would be premature.