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June brought no respite to the automobile industry, which has remained gridlocked due to a demand slowdown fuelled by a liquidity crunch. As the sales numbers for the month suggest, even new launches by manufacturers have failed to lure the customers.
In the passenger vehicle segment, market leader Maruti Suzuki reported a year-on-year (YoY) decline of 17 per cent in domestic sales to around 1.11 lakh units during June compared with 1.34 lakh units in the same month last year.
Similarly, sales of ‘Creta’ maker Hyundai Motor India declined by seven per cent to 42,007 during the month against the same period last year. The company’s new launches, in the form of Santro and Venue, did not help shore up the numbers.
Similarly, Toyota Kirloskar Motor could not gain much after the launch of ‘Glanza’, the premium hatchback made by Suzuki Motor. The company reported sales of 10,603 units during last month, lower than the 13,088 units it sold in June 2018.
Honda Cars India reported a drastic fall of 41 per cent to 10,314 units, against 17,602 units last year The sharp decline is despite the launch of its premium sedan Civic.
“The auto industry is going through its worst slowdown with continuous decline for many months. Going forward, any initiative which can jumpstart the demand will definitely be a positive for the industry,” Rajesh Goel, Senior Vice-President and Director, Sales and Marketing, Honda Cars India, said.
Home-grown Tata Motors also reported a 27 per cent YoY decline in its sales to 13,351 units (18,213 units).
M&M bucks the trend
The only exception was Mahindra & Mahindra, which reported sales of 18,826 units during June, a jump of 4 per cent compared with 18,137 units in the corresponding month last year.
According to Puneet Gupta, Associate Director of Automotive Forecasting at IHS Markit, the industry’s crisis is deepening and even multiple new launches have failed to stimulate demand.
However, he added that once the monsoon is over (by July-end), the market may rebound because of the positive events that have happened in the last few months.
“A clear mandate for single party in elections, lowering of repo rates in the last three quarters, efforts to contain the NBFC crisis, multiple launches by big manufactures like Tata Harrier and Hyundai Venue, and new companies such as Kia and MG Motor entering India and launching cars in the ‘hot’ SUV segment can reverse the negative sales trend,” Gupta added.
Two-wheeler segment
In the two-wheeler segment, all the players, including the market leaders Hero MotoCorp and Honda Motorcycle & Scooter, reported a decline in sales during the month.
In the commercial vehicle segment too, most of the companies — barring Volvo and Maruti Suzuki India — have reported a fall in sales during the month.
According to manufacturers, the progress of monsoon will be a key factor to watch for for the revival of demand in certain segments over the next quarter.
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