Order backlog, export market may keep PV, two-wheeler ...
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G BALACHANDAR Chennai, June 1 Even as localised lockdowns have pulled down the demand for vehicles, strong backlog of orders and buoyant export scen- ario are likely to give some cush- ion for passenger vehicle and two-wheeler makers in the ini- tial phase of post-lockdown till the pent-up demand kicks in. Sales of cars, two-wheelers and commercial vehicles were hit during May due to the second wave of Covid-19 and the resultant localised lockdowns. As daily new cases start to de- cline in many States, there is a hope of lockdown being lifted, at least partially, in the coming weeks. Meanwhile, there has also been an uncertainty over the demand scenario in the post-lockdown phase this time. While industry representat- ives hope pent-up demand will kick in like last time, others be- lieve that this time demand re- covery may be delayed due to the severe impact of the second wave and higher number of in- fections in rural areas. However, there will be some respite in the short term after the lifting of lockdown. While several car makers have a strong backlog of orders to execute amid constraints in production due to semi-conductor short- ages, the buoyant demand in ex- port markets may keep two- wheeler makers busy till the do- mestic demand revives. “Most of the passenger vehicle OEMs carry healthy or- der books,” says an analyst of Emkay Global Financial Services. For example, Mahindra & Mahindra says the waiting period for its Thar stands at about 10 months with total bookings at more than 55,000 units. XUV300 waiting period stands at 12 weeks while that for Scorpio and Bolero is placed at 6-8 weeks. Similarly, most of the other PV makers also carry a strong order book, particularly for their new models. So, when the governments announce gradual lifting of lockdown, most of the PV makers will start serving the ex- isting orders for some time. Impact on demand In the two-wheeler segment, second wave impact on de- mand is more severe as semi- urban and rural areas are grap- pling with a higher number of Covid-19 infections unlike last time when these areas were rel- atively insulated from the virus. But the good news for them is the robust export sales at a time domestic demand is expected to take some time for recovery. Country’s top two-wheeler ex- porter Bajaj Auto managed to maintain a decent level of ex- ports during May amid lock- down challenges. It exported 1.80 lakh units compared to about 2.22 lakh units in April, which was the second highest monthly export number for the company. TVS Motor Company, the second largest exporter of two- wheelers from India, clocked higher export volumes in the lockdown-hit May than the pre- vious month. Its two-wheeler ex- ports stood at 102,332 units in May (as compared to 94,801 units in April ). Also, this is the second time this year , the com- pany clocked exports of more than 1 lakh units. In March, it ex- ported 105,282 units. “The demand in the interna- tional market continues to be robust,” says TVS Motor Com- pany. Pent-up demand seen picking up Order backlog, export market may keep PV, two-wheeler makers busy in near term
Transcript of Order backlog, export market may keep PV, two-wheeler ...
G BALACHANDARChennai, June 1
Even as localised lockdownshave pulled down the demandfor vehicles, strong backlog oforders and buoyant export scen-ario are likely to give some cush-ion for passenger vehicle andtwo-wheeler makers in the ini-tial phase of post-lockdown tillthe pent-up demand kicks in.
Sales of cars, two-wheelersand commercial vehicles werehit during May due to thesecond wave of Covid-19 and theresultant localised lockdowns.As daily new cases start to de-cline in many States, there is ahope of lockdown being lifted,at least partially, in the comingweeks. Meanwhile, there hasalso been an uncertainty overthe demand scenario in thepost-lockdown phase this time.
While industry representat-ives hope pent-up demand will
kick in like last time, others be-lieve that this time demand re-covery may be delayed due tothe severe impact of the secondwave and higher number of in-fections in rural areas.
However, there will be somerespite in the short term afterthe lifting of lockdown. Whileseveral car makers have a strongbacklog of orders to executeamid constraints in productiondue to semi-conductor short-ages, the buoyant demand in ex-port markets may keep two-wheeler makers busy till the do-mestic demand revives.
“Most of the passengervehicle OEMs carry healthy or-der books,” says an analyst of
Emkay Global FinancialServices.
For example, Mahindra &Mahindra says the waitingperiod for its Thar stands atabout 10 months with totalbookings at more than 55,000units. XUV300 waiting periodstands at 12 weeks while that forScorpio and Bolero is placed at6-8 weeks. Similarly, most of theother PV makers also carry astrong order book, particularlyfor their new models.
So, when the governmentsannounce gradual lifting oflockdown, most of the PVmakers will start serving the ex-isting orders for some time.
Impact on demandIn the two-wheeler segment,second wave impact on de-mand is more severe as semi-urban and rural areas are grap-pling with a higher number ofCovid-19 infections unlike lasttime when these areas were rel-atively insulated from the virus.
But the good news for them is
the robust export sales at a timedomestic demand is expectedto take some time for recovery.Country’s top two-wheeler ex-porter Bajaj Auto managed tomaintain a decent level of ex-ports during May amid lock-down challenges. It exported1.80 lakh units compared toabout 2.22 lakh units in April,which was the second highestmonthly export number for thecompany.
TVS Motor Company, thesecond largest exporter of two-wheelers from India, clockedhigher export volumes in thelockdown-hit May than the pre-vious month. Its two-wheeler ex-ports stood at 102,332 units inMay (as compared to 94,801units in April ). Also, this is thesecond time this year , the com-pany clocked exports of morethan 1 lakh units. In March, it ex-ported 105,282 units.
“The demand in the interna-tional market continues to berobust,” says TVS Motor Com-pany.
Pent-up demandseen picking up
Order backlog, export market may keepPV, two-wheeler makers busy in near term
