Auto sales continue to slump in September

Firms pin hopes on festive purchases

October 01, 2019 09:42 pm | Updated 10:15 pm IST - NEW DELHI / Mumbai / CHENNAI

TIRUCHI, TAMIL NADU, 02/07/2017: Car buyers are keeping their fingers crossed with the introduction of Goods and Services Tax. Picture shows several new cars kept for sale at a showroom in Tiruchi.
Photo: B.Velankanni Raj

TIRUCHI, TAMIL NADU, 02/07/2017: Car buyers are keeping their fingers crossed with the introduction of Goods and Services Tax. Picture shows several new cars kept for sale at a showroom in Tiruchi. Photo: B.Velankanni Raj

Automobile sales in the country continued to decline in September but the industry is hopeful of buyers returning to the market on the back of festive celebrations along with factors, such discounts and good monsoons spurring purchases.

Automakers have already begun seeing an increase in showroom footfalls and retail bookings. This is also reflected in the vehicle registration data available on the Ministry of Road Transport and Highways website. The data show that across 31 of the 36 States, vehicle registrations stood at over 19.33 lakh units in September, the highest monthly registrations since November 2018 when the number stood at over 21.01 lakh registrations.

While retail sales — represented by vehicle registrations — show signs of a pick-up, wholesales continue to fall. Interestingly, even at the wholesale level, sequential monthly sales show a rise, as in the case of Maruti.

Maruti Suzuki India on Tuesday saw its domestic passenger vehicle (PV) sales decline 27% last month to over 1.1 lakh units, down from about 1.51 lakh units in the year-ago period. On a sequential basis, September sales are higher than the 93,173 units seen in August. The company’s domestic PV sales stood at 93,173 units sold in August 2019.Sales of mini cars comprising Alto, Old WagonR and the newly launch S-Presso, stood at 20,085 units, down 42.65% from 34,971 units in the same month last year. Likewise, sales of compact segment cars -- Swift, Celerio, Ignis, Baleno and Dzire, fell 22.7% to 57,179 units, while those of mid-sized sedan Ciaz tumbled 72.5% to 1,715 units.

Sales of utility vehicles, including Vitara Brezza, S-Cross and Ertiga, declined marginally to 21,526 units as compared to 21,639 in the year-ago month.

Hyundai Motor India said its domestic sales fell 14.8% to 40,705 units last month, while Honda Cars India saw domestic sales of 9,301 units in September 2019 as against sales of 14,820 units in September 2018. In a statement, MG Motor India said it has recorded retail sales of 2,608 units of the MG Hector in September 2019.

Rajesh Goel, senior vice- president and director — sales and marketing, Honda Cars India, said, “While the market remained tough in September, auto sales saw an uptick from this August 2019 which is a positive sign. We hope the consumer sentiment further improves during the ongoing festive season and helps the sales momentum. There are attractive offers available in the market which make this as the best time for customers to buy new cars.

In passenger vehicles, homegrown Mahindra & Mahindra sold 14,333 passenger vehicles in September 2019, down 33% year-on-year. “We are positive that this festive season, will augur well for us and the automotive industry,” said Veejay Ram Nakra, chief of sales and marketing, automotive division, M&M Ltd. “This, in addition to factors such as the good monsoon and recently announced positive government initiatives should help revive the industry in the short term,” he added.

M&M’s commercial vehicles segment were 18% lower at 18,872 units, while those of medium and heavy commercial vehicles were 62% to 408 vehicles.

Tata Motors’ sales in domestic market tumbled nearly 50% to 32,376 units from 64,598 units in the year ago month. Domestic passenger vehicle sales stood at 8,097 units as against 18,429 units in September last year. Mayank Pareek, president, passenger vehicles business unit, Tata Motors Ltd. said, “Towards the end of the month, there was an encouraging response in terms of customer footfalls. Customers have responded well to our festive offers as reflected in 11% more retail in September 2019 compared with August. However, the industry continued to decline in September.”

“Our focus continued to be on retail in line with our strategy of new paradigm. In September, our retail was 31% more than offtake; as a result, dealer stock came down by around 10%. In H1, network stock has been reduced by 21%, the lowest in the last 10 quarters. This helped in rotation of dealer working capital and preparing the network for the festival season.”

Bajaj Auto’s total sales fell 20% to 4,02,035 units in September. The company had sold 5,02,009 units in the same month a year ago.

Commercial truck maker Ashok Leyland reported a 57% dip in domestic sales to 7,851 units during September 2019 from a year earlier.

During the period under review, the sale of medium and heavy commercial vehicles (M&HCV) trucks declined by 74% while that of M&HCV buses by 26%. Light commercial vehicles sales contracted by 24% to 5,022 units, said the company in a regulatory filing.

TVS Motor Co. sales dropped to 3.16 lakh units during September 2019 against 4.24 lakh units recorded in the corresponding period a year earlier. Planned rationalisation of BS-IV stocks is reflecting in the sales growth difference between September 2018 and September 2019, said the company in a statement.

However, the company reported a 17% increase in its two-wheelers exports to 57,746 units and three wheeler by 13% to 15,003 units.

Eicher Motors Ltd, the makers of Royal Enfield, also reported 17% dip in its domestic sales to 59,500 units. Exports increased by 191% to 4,642, the company said in a regulatory filing.

In the two-wheeler segment, Hero MotoCorp sold a total of over 6.12 lakh units last months as against over 7.69 lakh units of motorcycles and scooters sold in September 2018, a decline of over 20%. However, month-on-month, the company saw sales growth of 12.6% from over 5.43 lakh units in August 2019.

Meanwhile rival Honda Motorcycle & Scooter India said it sold a total of about 4.85 lakh units, of which over 4.55 lakh units were in the domestic market. The domestic sales were down 12.39% from over 5.20 lakh units in the same period last year. “Customer sentiment is showing some positivity in the first two days of Navratri (September 29-30),” the company said.

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