Workers fit out Maruti Suzuki Swift cars on an assembly line in Manesar in Haryana state. Photo: AFP

India’s largest carmaker, Maruti Suzuki, suffered losses for the April-June quarter, the first since it became public 17 years ago, because the Covid-19 pandemic and the subsequent lockdown to contain it severely disrupted its operations.

It posted a consolidated loss of 2.68 billion rupees (US$ 36 million) as against a profit of 13.76 billion rupees ($184 million) in the year-ago quarter. The company said it was adversely impacted by the lockdown, though its losses were offset partially by lower operating expenses.

For the month of April, the carmaker reported zero sales as its production facilities remained closed due to the lockdown. In May, production and sales resumed to a limited extent, but the company said that for the whole quarter it was equivalent to just two weeks of regular operations.

The company said it had formulated elaborate safety protocols, as its first priority was the health, safety and well being of all employees, associates and customers across the value chain.

In this quarter Maruti Suzuki sold a total of 76,599 vehicles, down 81% from 4,02,600 units sold in the corresponding period a year ago. Sales in the domestic market stood at 67,027 units while exports were at 9,572 units, down 82% and 66% respectively on a year-on-year basis.

The carmaker’s revenue also dipped 78.67% on a year-on-year basis to 41.12 billion rupees ($549 million), down from 193 billion rupees ($2.6 billion) reported in the previous fiscal.

The adverse effect of Covid-19 was felt across the automotive sector. According to the Society of Indian Automobile Manufacturers, an industry body, there was a 51% slump in total vehicle sales in the month of June as against the same period last year. Passenger vehicles suffered a 49.6% decline in domestic sales at 105,617 units in June 2020, as compared to 209,522 units sold in the same period last year.

With lockdown in force people were wary of visiting showrooms because of the fear of contracting the virus. Many had also put off buying cars because of uncertainties related to their jobs and businesses. Due to the disruption caused by the coronavirus across various industries, job losses and salary cuts have been rampant across all sectors.

Surprisingly, when the government recently announced a 20-trillion rupee stimulus package to help the industries cope with the pandemic, it left out the automobile sector.

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