Woes of home-grown automakers Mahindra & Mahindra and Tata Motors continued to pile up with both the companies reporting a decline in monthly sales in August. While M&M’s total sales dipped over 17 per cent to 37,897 units during the month, Tata Motors’ sales were down 31 per cent to 49,611 units compared with the year-ago period.

For the auto giants, passenger as well as commercial vehicles’ segments have taken a beating. Passenger car sales for Tata Motors have almost halved from 22,311 units in August 2012 to 11,564 units last month. For M&M, sales declined 27.5 per cent to 15,821 units in August 2013.

In the commercial segment, M&M reported a 3.85 per cent decline at 13,718 units as against 14,267 units in August 2012. In the same segment, Tata Motors reported 26.5 per cent decline to 33,153 units last month.

“The weakening rupee, resulting in increased inflation, is impacting cost of operations. The auto industry, which is currently going through one of its most challenging phases, is in desperate need of some short-term fiscal stimulus,” M&M Chief Executive (Automotive Division) Pravin Shah said in a statement.

M&M’s domestic sales fell 18 per cent to 35,159 units while for Tata Motors the decline was 34 per cent higher at 44,717 units. M&M’s exports declined 9.03 per cent to 2,738 units. However, for Tata Motors, exports were a bright spot and increased by 12 per cent to 4,894 units last month.

Car makers have been struggling with slowdown in sales amid a weak economy, depreciating rupee and rising fuel prices. Since automakers are dependent on imports for many components, rupee depreciation has increased their costs. Combined with a slowdown in sales, the sector is now clamouring for government intervention.

M&M’s Shah added, “Immediate action by the government is needed so that auto makers do not lose out on the upcoming festivalseason wherein sales could bring some cheer for the industry and add revenue to the government.”


(This article was published on September 1, 2013)
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