August anguish: Auto sales skid further

The auto industry seems stuck on the slow lane as the August sales numbers indicate. Impacted by weak consumer sentiment and deferral of purchases, passenger vehicle sales fell during August on a year-on-year (YoY) basis. Severe floods across States also hurt demand, companies said, adding that they are expecting better sales from the festival season.

Market leader Maruti Suzuki India has reported a 36 per cent YoY decline in sales during August to 93,173 units (1,45,895 units).

The company, which is a market leader in the compact segment, saw the numbers falling to 54,274 units last month compared with 71,364 units in the corresponding month of 2018.

Hyundai Motor India has also reported a double-digit YoY decline in sales (17 per cent) to 38,205 units (45,801 units in the same month last year).

Honda Cars India and Tata Motors, in particular, have reported the most dismal numbers, selling less than half of the units they sold last year in August.

However, the companies are expecting an improved show during the upcoming festival season.

“Under the challenging market situation, we continued to focus on improving retail sales. Our retail sales were 42 per cent more than offtake, and as a result, the network stock came down by over 3,000 vehicles.

“This prepares dealers well for the festival season. Our aim is to improve the retail capability,” Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors, said.

Special offers & editions

He said marking the onset of the festival season, the company will drive positive sentiments with special offers and several special editions.

Toyota Kirloskar Motor, which also reported a 24 per cent YoY decline in sales during August (10,701 vs 14,100), said that with the recent announcement of sops by the government, the demand may pick up from the current month.

“The measures announced by the Finance Minister recently to boost the auto sector including cheaper car loans, improving liquidity through credit expansion of public sector banks, deferring the one-time registration fees, higher depreciation for all vehicles and lifting the ban on purchase of new vehicles in government departments are likely to spur some demand. The latest FDI reforms, which will boost local manufacturing, also come as a positive move to propel growth in the industry in the long run,” N Raja, Deputy Managing Director, Toyota Kirloskar Motor, said.

In the commercial vehicle segment too, companies including Volvo Eicher Commercial Vehicles, Mahindra & Mahindra and Tata Motors have reported a decline in sales.