Coronavirus lockdown: Auto sales crash 45% in March; commercial vehicles worst hit
The coronavirus-induced nationwide lockdown in the country has taken a toll on the domestic automobile industry, which registered a massive yet not so surprising 45 per cent decline in sales in March.
The industry recorded sales of just over 10 lakh during the month with commercial vehicles bearing the brunt. Factories and dealerships across the country have been shut since March 25 as the country is under lockdown in view of the spread of the pandemic.
Sale of trucks and buses saw a steeper 88 per cent decline with sale of just 13,027 units. Two-wheelers sales registered a 40 per cent dip with scooters witnessing a 32 per cent decline at 263,181 units while motorcycles saw a 42 per cent contraction at 570,860 units. Sale of passenger vehicles declined by 51 per cent at 143,014 units last month. These are all historic lows.
"The month of March 2020 was one of the most challenging months for the Auto sector as the 21-day lockdown resulted in bringing the production and sales of vehicles to a standstill in the last week. As the revenues took severe hit, the OEMs struggled on meeting fixed cost and working capital requirements," said Rajan Wadhera, president, SIAM.
For the full financial year 2019-20, the auto industry declined by 18 per cent at 2.15 crore units, registering its worst performance in over two decades. Passenger vehicles saw a 17.8 per cent decline at 27.7 lakh units, which pegged it back by five years to levels last seen in financial year 2015-16.
Two-wheelers also saw a similar 17.8 per cent fall in sales during the year at 1.74 lakh units while commercial vehicles registered a 28.7 per cent decline at 717,688 units.
"We are engaged in a dialogue with the government on policy measures which could minimise the impact of COVID on the Indian economy and especially the automobile industry," Wadhera added. "There would be challenges on the supply side; demand side and also on the issue of availability of Finance which would all need to be addressed to bring back growth in the sector. We remain steadfast on 'Building the nation responsibly'."
While the lockdown is set to be extended beyond April 14, SIAM has predicted more pain for the industry in fiscal 2021 as it would take much longer for consumer sentiment to be revived even after the lockdown is removed. With the overall economy likely to grow at a much slower clip, SIAM has predicted another 20 per cent decline in volumes this financial year if the GDP grows at less than 1 per cent.
Even in the most optimistic scenario of the GDP growing by 4 per cent this year, the automobile industry would still decline by 13 per cent, it has said.
Coronavirus lockdown: Uber teams up with Flipkart to deliver essentials in Mumbai, Bengaluru, Delhi
Ride hailing company Uber has entered into a partnership with e-commerce giant Flipkart to deliver essential supplies during the ongoing nationwide lockdown in the wake of the coronavirus outbreak. Flipkart, India's leading online marketplace, will use Uber's fleet to deliver its customers essential supplies across Delhi, Mumbai and Bangalore, the cab aggregator said in a blog post.
This happens to be Uber's third business to business (B2B) partnership within a week, following similar deals with Bigbasket and Kolkata-headquartered chain Spencer's Retail, said Prabhjeet Singh, director - operations, and head of cities, Uber India & South Asia.
"All these deals help in keeping citizens indoors so we can collectively support the government in helping contain the spread of COVID-19," Singh said.
He said that the cab service provider will not charge any commission for this service, so all the money earned through these deliveries will be given to drivers.
"In line with government guidelines to contain the spread of COVID-19, all drivers associated with this service are being provided masks, gloves, sanitisers, and specialised safety training to ensure the highest possible safety and hygiene standards," he added.
The deal will help Flipkart to move essential supplies from our sellers/ vendors to customers in the shortest possible span of time. Flipkart had temporarily suspended operations last week and later resumed services the same day after assurance of safe passage of its supply chain and delivery executives by local law enforcement authorities.
Last week, Uber announced it had partnered with grocery firm BigBasket to deliver essential products in Bengaluru, Hyderabad, Chandigarh and Noida.
Recently, the cab aggregator launched its UberMedic service to provide frontline healthcare workers safe, reliable and efficient transportation. The firm has tied up with the National Health Authority (NHA) to offer free UberMedic rides to healthcare workers in select locations for the next month. The deal will initially facilitate the provision of 150 cars free of cost to support medical facilities in New Delhi, Noida, Ghaziabad, Kanpur, Lucknow, Prayagraj and Patna.
ICICI Bank cuts interest rate on savings account, FDs
Private lender ICICI Bank has reduced interest rate on fixed deposits and savings account by up to 50 basis points (bps). The reduction in interest rates on savings accounts will be effective from April 9, while new rates on FDs will apply from April 3, 2020.
In a filing to the stock exchanges, the lender said it has cut interest rates on its fixed deposits (FDs) by up to 50 bps (1 bps = 0.01%) across various tenures. Now one-year FD will fetch an interest rate of 5.8% per annum, compared to 6.2% earlier, down 40 bps. While interest rate on two-year FDs has been reduced by 50 bps to 5.8%, five-year FDs by 40 bps to 6%.
These revised interest rates will be applicable for new deposits and renewal of existing term deposits, the bank said.
Besides, ICICI Bank has cut savings bank account interest rate by 25 bps with effect from April 9, 2020. For savings account balance below Rs 50 lakh, the interest rate will come down to 3.25% per annum from 3.5% per annum, and amount above Rs 50 lakh will earn 3.75% per cent.
The move came after the Reserve Bank of India (RBI) announced 75 bps cut in the repo rate on March 27. On the same day, State Bank of India, the country's largest lender, had cut its FD rates by up to 50 bps across various tenures.
Savings bank account interest is calculated on a daily basis on the daily closing balance in the account, at the rate specified by the bank in accordance with Reserve Bank of India directives.
Earlier on Tuesday, the government had announced reduction in interest rates on small savings schemes like the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, post office term deposit and others, between 70 bps and 140 bps for the April-June period, with effect from April 1, 2020.
India's unemployment rate in March rises to nearly 9%, highest in 43 months: CMIE
Even as India fights the spread of COVID-19 pandemic, India's unemployment rate surged to nearly 9 per cent, highest in the last 43 months, according to data released by think-tank Centre for Monitoring Indian Economy (CMIE). The unemployment rate stood at 8.74 per cent in March, highest since August 2016 when demonetisation happened, CMIE data showed. In August 2016, the unemployment rate was 9.59 per cent. While the unemployment rate was recorded at 9.35 per cent in urban areas, it stood at 8.45 per cent in rural parts of the country, the data showed. In February, it was recorded at 7.78 per cent.
The unemployment rate largely remained under 8 per cent from April 2019 till February 2020, except in July and October when it surpassed the 8 per cent mark.
Unemployment rate in states
Tripura was the state with the highest unemployment rate for March at 29.9 per cent, according to CMIE's monthly time series. Puducherry with 1.2 per cent was the state with the lowest unemployment rate.
The labour participation rate fell to 41.9 per cent in March, lowest since January 2016 (when CMIE started with this survey). The employment rate also fell to its worst of 38.24 per cent (lowest since CMIE began the survey). The number of unemployed people who were actively looking for a job was reported at 3.79 crore. This is the highest since October 2016, when 3.85 crore unemployed people were actively looking for a job. The labour force in India in March 2020 stood at 43.3 crore. Meanwhile, the Consumer Pyramids Household Survey was suspended during the week ended March 29 because of the lockdown.
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Coronavirus: India's manufacturing activity growth at 4-month low
India's manufacturing activity expanded at its slowest pace in four months in March and is likely to get worse as demand and output take a hit from the coronavirus outbreak, putting a severe dent in business optimism, a private survey found.
A 21-day nationwide lockdown, which started on March 25 in the world's second most populous country, is expected to deliver a heavy shock to the economy despite massive fiscal and monetary support packages by the government and the Reserve Bank of India last week.
The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, declined to 51.8 last month from February's 54.5, its lowest since November but still above the 50-mark that separates growth from contraction for a 32nd month.
"The Indian manufacturing sector remained relatively sheltered from the negative impact of the global coronavirus outbreak in March, however, there were pockets of disruption and a clear onset of fear amongst firms," noted Eliot Kerr, economist at IHS Markit.
"The most prominent signs of trouble came from the new export orders and future activity indices, which respectively indicated tumbling global demand and softening domestic confidence."
A sub-index that tracks overall demand in the sector hit a four-month low as foreign demand contracted for the first time in nearly two and a half years, falling at its fastest rate since September 2013.
That was despite input and output prices increasing at their weakest in five and six months, respectively, a sign of a decline in overall inflation, which has continued to remain above the RBI's medium-term target for five months.
Lower price pressures could provide additional room for the central bank to ease policy further. It cut its key interest rates by 75 basis points and introduced a stream of unconventional measures last week.
Optimism about output over the coming 12 months fell to a low not seen since October 2015, echoing the findings of a Reuters poll which forecast Asia's third-largest economy to grow at its weakest pace in the fiscal year 2020/21 since the global financial crisis.
"Should the trajectory of injections continue in the same vein, the Indian manufacturing sector can expect a much sharper negative impact in the coming months, similar to the scale seen in other countries," added Kerr.