New Delhi/Singapore: Mahindra & Mahindra Ltd. says India car sales will take almost another year to return to pre-pandemic levels after a resurgent outbreak shuttered auto plants and showrooms.
The rebound may happen faster as India is “starting to see a huge flurry of activities over the last week” as infections decline and lockdowns ease, Mahindra Group Chief Executive Officer Anish Shah said in a Bloomberg Television interview Thursday. “But we have to wait and see whether that really takes off. If we go back to 2019 levels I think that would likely be starting around April next year.”
India’s auto industry had just begun to recover from its worst-ever slowdown before the nation was hit by a devastating wave of Covid, which killed more than 150,000 people in two months. The outbreak is now ebbing, with new infections holding near the lowest level since early April.
Passenger vehicle sales fell 10% in April from March, according to the Society of Indian Automobile Manufacturers. Total vehicle sales, including SUVs, motorcycles and scooters were 1.27 million units. That figure was running at more than 2.8 million a month in the year through March 2020 before the virus hit.
Automakers with plants in Tamil Nadu, the industry’s hub in India, last month suspended operations and reduced shifts as employees threatened to go on strike due to health concerns. Near the peak of the outbreak, Maruti Suzuki India Ltd., the country’s biggest carmaker, said it may have to halve production capacity. It has since resumed production, as have the likes of Hero MotoCorp Ltd., India’s biggest producer of two-wheelers.
Shah, who started as CEO two months ago, is betting on electric cars and digital services to revive the 76-year-old conglomerate’s fortunes. However, the shift to electric vehicles in happening far more slowly in India than countries like China, with the the costs of battery powered-models too high, access to charging infrastructure limited and concerns over the reliability of power grids.
Mahindra will look at partnerships for its electric-vehicle business, Shah said. The carmaker will invest 30 billion rupees ($410 million) in EVs in the near term and launch six models in the next few years, he said. Still, “India is a few years behind the rest of the world in EVs,” Shah said. –Bloomberg