Most OEMs including Maruti Suzuki, Hyundai, M&M to Hero MotoCorp and Honda Motocorp have opened up partial operations in the range of 30 percent-50 percent of their domestic retail touchpoints.
Leading automakers re-opening showrooms after a month-long lull indicates an encouraging start from zero. Most OEMs including Maruti Suzuki, Hyundai, M&M to Hero MotoCorp and Honda Motocorp have opened up partial operations in the range of 30 percent-50 percent of their domestic retail touchpoints. But the return is also riddled with challenges.
OEMs are faced with the task of executing a tough balancing act - maintaining continuous operations in the face of the dynamic zoning and guidelines at district levels, and assessing if there will be enough customers to generate revenues in these cash-starved times.
The good news first.
In small numbers, but customers are still buying vehicles. Maruti Suzuki has so far delivered more than 3000 cars, Hyundai had done over 2,200 deliveries, and Toyota had crossed 200 deliveries on Wednesday. Hero MotoCorp said it had delivered 10,000 units in only the first week of re-opening dealerships, while Honda 2Wheelers retail sales have crossed the 21000 marks on Friday.
To put the numbers in context, Hero MotoCorp sells anywhere from 7-8 million vehicles annually, while Maruti Suzuki last year did upward of 1.5 million units in sales.
However, it is important to note these volumes largely reflect the closure of deals initiated before the nationwide lockdown brought the entire automotive value chain to a halt and also invoicing of stock to the sub-dealer network by two-wheeler manufacturers.
Once these pending orders are delivered, however, automakers say they are uncertain what future demand will look like, and the viability of keeping showrooms open in the event of these dynamic circumstances. The number of open touchpoints is also a dynamic figure, as dealers operating under distinct riders are in some cases having to shut down owing to no footfall or on the instruction of district authorities.
Bajaj Auto, which has started production across its facilities in the country and has also seen showrooms open up in some areas, says there is higher traffic for services than for sales, with sales mostly being the completion of deals in process pre-lockdown.
The states of Kerala and Karnataka are the big retail markets in the face of the ongoing lockdown restrictions, followed by Goa and the North-Eastern states. Some parts of Rajasthan, Andhra Pradesh, Madhya Pradesh and Punjab are also seeing some traction. Major metros including Mumbai and Delhi have still not allowed any auto showrooms to open up in the cities so far.
A steady number of inquiries is also keeping OEMs morale up - although the sales picture, some OEMs say, is hard to fathom at this point, and should become clearer in a month's time.
First Published: IST