Chennai: India’s auto sector is on a downward hill at the moment with major manufacturers posting decline in sales that remained subdued owing to rising fuel costs, increasing sales in the used car segment, uncertainty before the Lok Sabha elections and liquidity crunch being faced by non-banking financial companies (NBFCs).
Country’s largest carmaker Maruti Suzuki India (MSI) said in a statement that it saw a 22 per cent decline in sales at 1,34,641 units in May. Last year, the firm had sold 1,72,512 units.
Domestic sales declined by 23.1 per cent to 1,25,552 units as against 1,63,200 units in the year ago month, it added.
Sales of mini cars comprising Alto and WagonR stood at 16,394 units as compared to 37,864 units in May last year, down 56.7 per cent. The compact segment, including models such as Swift, Celerio, Ignis, Baleno and Dzire, was down 9.2 per cent to 70,135.
Sales of utility vehicles that were on a record high and include models like Vitara Brezza, S-Cross and Ertiga, were down 25.3 per cent to 19,152.
Tata Motors too reported a 26 per cent decline in domestic sales to 40,155 units in May. The company had sold 54,290 units during the same month last year.
The cumulative sales for the domestic market in April-May was at 82,684 units compared to 1,07,758 units over last year, registering a decline of 23 per cent.
Tata Motors commercial vehicles business sales in the domestic market stood at 29,329 units for the month, registering a decline of 20 per cent when compared to 36,806 units sold in the same month last year.
Honda Cars India Limited (HCIL) sales dipped 27.87 per cent to 11,442 units in the fifth month of the year. HCIL said it also exported a total of 450 units during last month.
“The market continues to be tough for the auto industry with two consecutive months of such a high de-growth. It is unprecedented in the last two decades. After elections, we were expecting an upswing which has not yet come. Factors like liquidity that is affecting capital to auto sector along with increase in fuel prices have remained a challenge to revive consumer sentiments,” Senior VP and director, Sales and Marketing, HCIL, Rajesh Goel said.
The company is still hopeful that sales will revive due to favourable indicators on monsoon and expected actions by the new government, Goel noted.
Toyota Kirloskar Motor (TKM) reported 6.2 per cent decline in total vehicle sales to 13,066 units in May, as against 13,940 in the same month last year.
In the domestic market, the company reported sales of 12,138 units last month, down 7.4 per cent as compared to 13,113 units in May 2018, TKM said in a statement.
“The company exported 928 units of the Etios series this month thus clocking a total of 13,066 units….The company exported 827 units of the Etios series (in May,2018)…thus clocking a total of 13,940 units,” it added.
Deputy managing director, TKM, N Raja, said, “The customer demand had witnessed a continued slowdown before the election results. Customers have been cautiously spending which has led to sluggishness in the domestic auto sales. Added factors like liquidity tightening, high insurance costs, increase in fuel costs have also weakened the retails.”
On the two-wheeler market front, Royal Enfield saw its sales go down by 16.5 per cent at 62,371 units in May. The company had sold 74,697 units in the same month last year, it said in a BSE filing. Domestic sales stood at 60,211 units in May, as compared with 72,510 units in the same period last year, registering a decline of 17 per cent.
| Buying used |
| The size of India’s pre-owned or second-hand car market could be between 6.7 million units and 7.2 million units by 2022, with the value of the segment pegged at Rs 50,000 crore, according to a sector outlook released by Mahindra First Choice Wheels Ltd, the pre-used car business of Mahindra and Mahindra Ltd.
According to the report, the share of organised retail channels will be around 30 per cent, with the share of unorganised channels likely to continue at 40 per cent. About 30 per cent of customers will continue to buy the product directly from previous owner, it said. The used car market touched the four-million-unit mark in FY19 which is 1.2 times the new car market. |