Automakers initiate production ramp-up to recoup lockdown losses

India’s passenger vehicle makers are ramping up production to recoup the output lost during the lockdowns since April, with market leader Maruti Suzuki expected to record its highest ever volume for a month in July.
Maruti Suzuki is scheduled to produce 198,000 units next month, industry insiders with knowledge of its plans said. They projected the July production volume of Hyundai Motor at 60,000 vehicles and Tata Motors at 30,000 units, taking the total expected output of the top three automakers alone to close to 300,000 units.

Including the output of other passenger vehicle makers, the industry output could be around 350,000 units next month.

This will be just short of the high of 364,000 units produced in January 2019, when consumers trying to beat a price hike before the transition to BS-VI emission standards had driven up demand.

For the next quarter, industry insiders are projecting India’s passenger vehicle production to top 1 million units, which will be the highest for the July-September period at least in three years, provided there is no third wave of the pandemic.



The industry expects pent-up demand to reflect in the market in the coming months as was after the lockdown last year, and the companies are better prepared to meet that this time, said Gaurav Vangaal, associate director at vehicle market forecasting firm IHS Markit. “The ramp-up is much stronger and schedules are improving every week,” he said.

Also, automakers are sitting on large pending orders for their popular models and the inventory at dealerships is low, which require them to quickly step up production, Vangaal said.

Maruti Suzuki didn’t comment on the market outlook. “We do not offer any guidance on monthly or quarterly volumes of production and sales,” it said.

The company had recorded its highest monthly production of 182,000 units in October 2020.

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Deepak Jain, chairman of Lumax Industries and president of the Auto Component Manufacturers Association, expects automobile production next quarter to match the July-September 2019 volume, based on the orders that the component makers are receiving.

They are also prepared to support increased manufacturing at automakers, unlike last year.

“While the retail stores were shut and vehicle makers advanced the maintenance shutdowns, manufacturing activities at our end were happening in the background,” he said. “We are optimistic as the gradual unlocking process starts; we have seen that there is an improvement in footfall in showrooms.”