Auto stocks slump nearly 12% as lockdown-hit automakers score nil domestic sales in April; Index drops over 6%

Auto stocks on Monday plunged nearly 12 percent after top carmakers reported zero monthly domestic sales in April.

Many auto firms including Maruti Suzuki reported zero monthly domestic sales for the first time ever in April after the nationwide lockdown halted output and shut sales network.

Shares of Tata Motors tanked 12.45 percent, Motherson Sumi Systems shares plummeted 12.27 percent, Apollo Tyres 9.45 percent, Hero MotoCorp 8.34 percent, Maruti Suzuki India 8 percent on the BSE.

Ashok Leyland tumbled 7.83 percent, TVS Motor Company 7.16 per cent, Mahindra & Mahindra 6.95 percent, Bajaj Auto 6.66 percent and Eicher Motors 6.30 percent.

The BSE Auto index fell by 6.33 percent in early trade.

Representational image. Reuters

Maruti Suzuki India, Hyundai Motor India Ltd (HMIL), Mahindra & Mahindra (M&M), Toyota Kirloskar Motor (TKM) and MG Motor India reported nil sales as they suspended operations even before the imposition of lockdown on 25 March to check the spread of coronavirus.

It, however, exported 632 vehicles after Mundra port in Gujarat resumed operations, MSI said in a statement.

Similarly, HMIL said it did not sell any vehicle last month in the domestic market due to suspension of manufacturing activities at its Chennai plant.

The company, however, exported 1,341 units last month.

The overseas dispatches took place by adhering to all guidelines set by the government and export regulating authorities while ensuring adequate safety and protection for everyone, it added.

Homegrown automaker M&M also reported zero sales of passenger and commercial vehicles in the domestic market. In the two-wheeler segment, niche bike maker Royal Enfield said it had zero sales in the domestic market.

"We are hopeful that our dealerships will open soon and have stocks to cover the first few weeks of sale," M&M Chief Executive Officer, Automotive Division Veejay Nakra said.

Similarly, TKM said the re-start of the entire value chain cycle and its restoration will be gradual as the industry is faced with varied challenges like low consumer sentiments, rebuilding of disrupted supply chains and return of workforce.

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"As with many other sectors, with the closure of dealerships and manufacturing, the operation of the automotive value chain has come to a grinding halt," TKM Senior Vice President (Sales and Marketing) Naveen Soni said in a statement.

These are critical times and the company was aware that there would be no wholesales in the month of April 2020, he added.

"As we prepare for a restart, we are working closely with our dealer partners to offer them the best support to re-stimulate demand in a safe and healthy atmosphere," Soni said.

MG Motor India said it has resumed operations at its Halol facility in the last week of April and now hopes that the production will ramp up in the month of May.

In two-wheeler segment, niche bike maker Royal Enfield said it had zero sales in the domestic market but exported a total of 91 units last month.

Bajaj Auto on Monday said it did not sell any two-wheelers or commercial vehicles in the domestic market in April.

The company, however, shipped 32,009 two-wheeler units to overseas markets last month, Bajai Auto said in a statement.

The company said it sold nil units of commercial vehicles in the domestic market but managed to export 5,869 units last month.

Bajaj Auto sold a total of 37,878 units last month, down 91 percent from 4,23,315 units in April 2019.

--With PTI inputs