COVID fallout: Low demand, supply woes hinder commercial vehicle production

NEW DELHI: While two-wheeler and passenger vehicle makers have restarted production without facing much difficulty, a few commercial vehicle (CV) manufacturers are struggling to reopen their facilities after the second wave of Covid-19 pandemic forced every automaker to suspend operations for multiple days last month. 

SML Isuzu on Monday informed that it has suspended production at its manufacturing plant in Punjab till June 11, citing lower demand and supply constraints.

The company sold just 554 commercial vehicles in the first two months of the current financial year (FY22) as against 3,068 vehicles sold in April-May period of FY20.

“Due to the ongoing pandemic situation and lockdowns enforced in most of the states, the company is still facing supply issues from some of its vendors. Further, demand for commercial vehicles has been adversely impacted especially for school buses due to non-opening of schools/educational institutions,” the company said in a BSE filing.

Hinduja Group flagship Ashok Leyland, which reported a 62 per cent month-on-month drop in May sales to 3,199 units, had last week said its plants are still not fully operational due to regional lockdowns.

In June, the company expects to run their facilities only for 5-10 days. It also noted that the demand scenario is yet to pick up due to lockdowns. 

Daimler India Commercial Vehicles had also shuttered production at its Tamil Nadu plant for three days between June 1 and June 3 due to temporary parts shortages caused due to lockdown restrictions.

Ratings agency Crisil said that the new wave-led curbs will limit domestic CV sales volume growth to 23-28 per cent this fiscal as against pre-pandemic levels of 32-37 per cent.