India’s auto sales continue on slower track in September

Low consumer sentiment continued to subdue sales performance of the Indian automobile sector in September, as major industry players reported significant decline in their respective sales figures.

On the flip side, there was some recovery seen in the sales momentum over August 2019, however, market observers said that more time for the recent policy measures to kick-in and extra incentives for consumers need to be given for the growth trend to re-emerge.

On a year-on-year (YoY) basis, the passenger car market leader - Maruti Suzuki India - reported a 24.4 per cent decline in its total vehicle sales, including exports.

A total of 122,640 units, including exports, were sold last month, compared to 162,290 vehicles sold in September 2018. Out of the total sales, domestic sales fell 24.8 per cent to 115,452 vehicles.

The auto major’s exports last month were recorded at 7,188 units, 17.8 per cent lower than 8,740 units exported in September 2018.

Similarly, automobile major Hyundai Motor India (HMIL) reported a decline of 8.1 per cent in its overall sales to 57,705 units from 62,757 units sold during September 2018.

The company’s domestic sales edged lower by 14.8 per cent to 40,705 units from 47,781 units. However, exports went up by 13.5 per cent to 17,000 units from 14,976 units shipped abroad in September 2018.

Another automobile major - Tata Motors - reported a 48.02 per cent slump in overall September sales to 36,376 vehicles in domestic and international markets compared to 69,991 units sold in the year-ago period.

The company reported a 50 per cent decline in domestic sales last month to 32,376 units from 64,598 units sold in September 2018.

In case of commercial vehicles, the sales declined by 45.4 per cent to 28,079 units compared to 51,419 units in the year-ago period.

“With the ongoing subdued demand, we continued our focus on the system stock correction by driving retail and aligning production,” Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors, said in a statement on Tuesday.

“Retail sales are estimated to be ahead of wholesale figures by over 16 per cent in September and over 27 per cent in the second quarter, reducing stock to a six-quarter low. We are monitoring the impact of the relief package announced by the government, and look forward to improved demand from revival in consumption and spend in infrastructure projects,” Wagh said.

Besides, the company sold 8,097 passenger vehicles last month, which is a decline of 56 per cent over 18,429 units traded during the same period last year.

Further, Mahindra & Mahindra’s overall automotive sales went down 21 per cent in September 2019 to 43,343 vehicles compared to 55,022 vehicles during September 2018.

The company’s domestic sales edged lower by 21 per cent to 40,692 units from 51,268 units, while exports went down by 29 per cent to 2,651 units from 3,754 units shipped abroad in September 2018.

According to Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, M&M: “We are positive that this festive season, with the onset of Navratra, will augur well for us and the automotive industry.

“This, in addition to factors such as good monsoon and the recently announced positive government initiatives should help revive the industry in the short term.”

Apart from vehicle manufacturers, the sales of two-wheelers were also heavily dented.

Honda Motorcycle & Scooter India’s total sales in September 2019 stood at 485,659 units, down from 555,740 units sold during the corresponding month of the previous year.

Hero MotoCorp sold 612,204 units of motorcycles and scooters during the month under review, down from 769,138 units sold during the year-ago period.

On the other hand, Suzuki Motorcycle India registered a YoY sales growth of 2.11 per cent to 73,658 units as compared to the 72,134 units off-take in the same period last year.

Commenting on passenger cars and commercial vehicles segment, Sridhar V., Partner, Grant Thornton India, said: “New introductions have been instrumental in the slight recovery in passenger car sales in September over August, while the YoY numbers indicate the extremely cold nature of the market. The market is yet to see the recovery mode set in.”

Meanwhile, automobile majors Mahindra & Mahindra and Ford Motor Company will create a joint venture (JV) firm, valued at $275 million, that will develop, market and distribute the US-based auto maker’s products in India.

Indo-Asian News Service