Confirming the fears that festive season uptick witnessed by the automobile industry is difficult to sustain because of economic stress the country is facing, Mahindra & Mahindra Ltd (M&M) has registered a 30 per cent decline in passenger vehicle sales during November this year compared to the corresponding month in the previous year.
But buoyed by a generous monsoon, the company's tractor sales were up about 13 per cent and a weak rupee came as a relief as the exports more than doubled last month.
In its filings with the stock exchanges, M&M said its total sales in November 2013, including exports, were 39,255 units compared with 48,143 units in the same month last year.
Sharp fall in passenger vehicles
Its passenger vehicle segment, which included UVs and Verito, recorded the sharpest fall to 16,771 units in November 2013 compared with 24,604 units in the same month during 2012.
The company’s domestic sales of all models took a knock, declining to 36,261 units from 46,755 units. In the four-wheeler commercial segment, the sales stood at 13,186 units (14,353), while in the three-wheeler segment, the sales were 5,861 units (6,867 units).
Doubling of exports
Exports more than doubled to 2,994 units from 1,388 units.
Pravin Shah, Chief Executive, Automotive Division, M&M, commenting on the results, said after the festive season month of October, the “auto industry has turned to further de-growth and continues to remain subdued’’.
Auto industry revival
He cautioned that unless steps were taken for the auto industry’s revival, he did not “foresee any immediate turnaround’’.
He cited several reasons including increase in input costs and the falling value of Indian rupee as some of the negative factors and said the company was focused on operational excellence to enhance the overall performance and remained “cautiously optimistic of the situation’’.
Jump in tractor sales
However, its tractor division derived significant benefit from the generous rainfall the country has witnessed with its tractor sales registering a 13 per cent jump to 22,343 units in the domestic market compared with 19,757 units in the same month last year.
Overall sales grew 13 per cent to 23,119 units with exports of 776 units (719 in November 2012), an eight per cent growth.
During April-November, the company had witnessed a 24 per cent growth in domestic tractor sales to 1,88,501 units (1,51, 987 units). But exports fell 10 per cent to 6,722 units from 7,475 units.
Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, M&M, was confident that the monsoon effect would sustain the robust demand for tractors during the rest of the current fiscal.
Shares of M&M were down by Rs 7.75 to Rs 937.50 in the opening minutes of trading on the NSE today.