On 2nd March, Nikkei Manufacturing Purchasing Managers’ Index which is a status report of the manufacturing industry compiled by HIS Markit, dropped to 54.5 in February from 55.3 in January. This decline in manufacturing is because of disruption in the sector owing to new BS-VI emission norms. The slowdown is also the result of the disruption in the supplies of components to the automotive industry from China because of the Corona outbreak.
As per the reports published in the leading national dailies India’s auto majors such as Hero MotoCorp, Bajaj Auto and TVS Motor Company also reported a double-digit decline in sales for the month of February as compared to the status exactly a year before. Hero MotoCorp’s sales have declined by 19.27% at 4,98,242 units being sold in February, compared with 6,17,215 units being sold in the corresponding month of the previous year.
Indian goods producers are alarmed since the outbreak of coronavirus poses threats to exports and supply chain, and businesses are becoming less confident about the year ahead, hence are restricting hiring activity.
Pollyanna De Lima
Principal Economist, HIS Markit
Talking to one of the leading national daily, Koichiro Hirao, Managing Director, Suzuki Motorcycle India stated ‘inching closer to the current fiscal year, we are happy with our sustained growth momentum’.
In the motorcycle, section sales have gone down. These sales last month stood at 4,79,310 units as against 5,58,884 units in February 2019, down 14.23 percent. The company’s exports are increased at 18,046 units in February 2020 as against 16,599 units in February 2019. TVS Motor Company has reported a 15.39% decline in total sales at 2,53,261 units in February 2020 as compared with 2,99,353 units in February 2019.
Bajaj Auto also reported a 10% drop in total sales at 3,54,913 units in February 2020, compared with 3,93,089 units in February 2019. The company said that the total domestic sales had declined by 24% at just 1,68,747 units in February 2020 as compared with 2,21,706 a year ago. On the other hand, Royal Enfield and Suzuki Motorcycle have reported of single-digit increase in sales in February by 1% and 3.5%, respectively. Both the companies’ growths in total sales were at 63,536 units and 67,961 units, respectively, in February 2020.