For Suzuki, Covid-19 continues to be a cause for concern in India

Murali Gopalan Mumbai | Updated on August 10, 2020

April-June global sales show the pandemic impact even while plants have now restarted

Suzuki Motor Corporation’s huge dependence on India has been borne out by its recently declared first quarter (April-June) results where the lockdown literally took the wind out of its sails.

The Japanese automaker’s tally of 2.63 lakh units saw Japan emerge its largest market with 1.06 lakh units while India was down a staggering 82 per cent to 66,000 units. This is hardly surprising considering that auto sales in India were zilch in April and just about sputtered to a semblance of recovery in May.

Europe’s contribution to this sorry state of affairs was 36,000 units while other regions made up for the balance 55,000 units. Even in Asia, the havoc caused by the pandemic was there for all to see. Indonesia was down 63 per cent to 9,000 units and Pakistan plummeted by 75 per cent to 8,000 units. The same story extended to Thailand, the Philippines, China and Myanmar where Suzuki car sales crashed and cumulatively totalled 14,000 units.

Compare this meagre tally of 2.63 lakh units in this period to 7.38 lakh units in the April-June quarter of 2019 and the Covid-19 impact is more than apparent. Not only was India the top market then with 3.7 lakh units but Japan was also relatively better at 1.67 lakh units with Europe at 75,000 units. Other parts of the world — Asia and a handful of smaller regions — made up for the balance 1.26 lakh units.

Covid-19 end unclear

At one level, this fall was only expected given the severity of the pandemic and the accompanying lockdown that pretty much flattened the economy. All automakers operating in India and the rest of the world suffered with the notable exceptions being Korea and Japan.

Even while Suzuki has indicated in its presentation that operations in India have “gradually started” both across its plants and dealerships, there is still some degree of apprehension. “As the infected patients increase daily in India, the end of Covid-19 is unclear,” states the company.

Right now, daily infections in India are now closer to the 60,000 mark even while the overall tally is rapidly on the rise. The country is now only behind the US and Brazil in the ranking list with experts reiterating that it is only a matter of time before it breaches the three million mark.

It is this reality that could have automakers like Suzuki worried simply because this can lead to state-wise lockdowns which, in turn, will throw the supply chain out of gear. This has been seen in Tamil Nadu, Karnataka and Maharashtra where Covid-induced lockdowns have brought down the shutters for a host of component makers.

Across the ASEAN region, where Suzuki operates in some key markets, the story was pretty much the same in terms of depressed sales “owing to prevention measures against Covid-19 taken at each country”. Consequently, Indonesia crashed due to the “impact of suspension and downsizing of production and sales” following large-scale social restrictions implemented from April 10.

Sales in the Philippines fell by a whopping 70 per cent year-on-year owing to restrictions on outings “such as the enhanced community quarantine in Luzon”. In the case of Thailand, there was an emergency declaration initially though “economic activity restrictions” were eased due to decrease in number of patients. As for Myanmar, the fall in sales was a result of suspension of automobile registration offices from March 25 to May 11.

Finally, on the two-wheeler side where India is its largest market too, Suzuki has little cause for cheer. Sales in the April-June quarter tumbled to 54,000 units (from the previous year’s corresponding period of 1.7 lakh units) while China climbed to the top slot with 94,000 (87,000) units.

Experts, however, believe that with personal mobility now becoming a near obsession among buyers, sales of motorcycles and scooters will grow in the reminder of this fiscal. Suzuki will be hoping that this will extend to entry-level cars too where it is the clear leader in the Indian market.

Published on August 10, 2020

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