Covid impact: Consumer goods' sales witness decline in May

The second Covid-19 wave has had a huge impact on the sales of consumer goods across the country.

According to The Economic Times report, the sale of goods like automobiles, air conditioners, smartphones, refrigerators, and washing machines had fallen sharply in May due to lockdown-induced disruption in production and retail channels.

Lower consumer footfall and spending, apart from lockdowns in most parts of the country have majorly led to this decline. June will likely witness some recovery as states begin to ease lockdown restrictions and lowering daily cases.

Decline in auto sales

Automakers sold nearly a third of the 2,86,728 vehicles in April 2021 and dispatched about 1,03,000 units in May, as per industry estimates. This was because a lot of them had to temporarily shut down their manufacturing units and curtailed production. Top auto manufacturers suspended operations to divert industrial oxygen for medical purposes, which also contributed to the sharp sales fall last month.

Maruti Suzuki sold 32,903 units in May, nearly a quarter of the 1,35,879 units sold in April 2021.

Tata Motors and Mahindra & Mahindra (M&M) saw domestic sales plunge 40% and 56% on a month-on-month basis to 15,181 units and to 8,004 units, respectively.

Toyota Kirloskar Motor, which had announced a maintenance shutdown at its facilities at the end of April, sold 707 units last month, a 90% decrease over the previous month.

Tata Motors sold 9,371 units in May, down by more than a third sequentially, while Ashok Leyland sales plunged 66% over April.

Impact on smartphones sales

“Phone buying was surely not the priority of customers dealing with the deadly second wave and abstaining from venturing out. Meanwhile, manufacturing activity was also majorly disrupted because of worker health issues,” said Tarun Pathak, research director at Counterpoint Research.

In India, a lot of smartphone makers like Foxconn, Wistron, Oppo, Vivo, and Samsung had to decrease their production capacity by up to 50% this month due to labour shortage.

“The online channels would account for over 55% share of all sales in the ongoing quarter as offline stores were the worst affected with consumer footfalls dropping sharply in malls and marketplaces, ” said Rajeev Nair, senior analyst at research firm Strategy Analytics.

He expects smartphone sales at roughly 27 million in the current quarter through June with some demand picking up as the unlock activity starts in major states.

As per the market trackers, the sale of TV sets, air-conditioners, refrigerators, and washing machines in May had plunged 65% over April.