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Auto majors in slow lane; July sales see double-digit slump

August 01, 2019 19:29 IST

The industry needs stimuli to help revive consumer demand and conversions.

Illustration: Dominic Xavier/Rediff.com

Continuing to face rough weather, Maruti Suzuki, Hyundai and three other auto majors reported a double-digit decline in sales in July as consumer sentiment remained subdued.

Market leader Maruti Suzuki India (MSI) said its domestic sales were down 36.3 per cent at 98,210 units last month compared to 1,54,150 units in July last year.

 

It was in June 2017 that the company's sales had last fallen below 100,000 units mark in a month.

Mini segment, comprising Alto and old WagonR, saw a massive slide of 69.3 per cent to 11,577 units as against 37,710 units in the year-ago month.

Similarly, the company's high selling compact segment, which includes models such as New WagonR, Celerio, Ignis, Swift, Baleno and Dzire, clocked 57,512 units’ sales in July as compared to 74,373 units in the same month last year, down 22.7 per cent, it said.

Sales of utility vehicles, including Ertiga, Vitara Brezza, S-Cross, were at 15,178 units in July as compared to 24,505 units in the year-ago period, down 38.1 per cent.

Rival Hyundai Motor India Ltd (HMIL) reported 10 per cent dip in domestic sales at 39,010 units last month as against 43,481 units in July 2018.

Likewise, homegrown utility vehicle major Mahindra & Mahindra reported 16 per cent decline in domestic market at 37,474 units as compared with 44,605 units in July 2018.

The company's passenger vehicle segment, which includes utility vehicles, cars and vans, reported sales of 16,831 vehicles last month as against 19,781 units in the same period of 2018, a dip of 15 per cent.

"The headwinds faced by the automotive industry continue as a result of subdued consumer sentiment, triggered by various factors," M&M chief of sales and marketing, automotive division Veejay Ram Nakra said.

The industry needs stimuli to help revive consumer demand and conversions, he added.

Honda Cars India Ltd (HCIL) reported 48.67 per cent decline in domestic sales to 10,250 units in July as against 19,970 units in the year-ago period.

"The de-growth in the automobile industry further intensified last month amidst weak buying sentiment and overall slowdown.

“We are also witnessing a lot of postponement of purchases," Rajesh Goel, senior vice president and director (sales and marketing) at HCIL, said.

He further said, "it is extremely worrisome since July 2019 decline is much severe than Q1 decline and that too when the industry had de-grown in July last year as well."

Similarly, Toyota Kirloskar Motor (TKM) said its domestic sales declined 24 per cent to 10,423 units last month as compared with 13,677 units in July 2018.

"The industry is deeply concerned with the increasing pressure of low customer sentiment faced by the sector.

“The high insurance costs, rise in taxes and liquidity crunch across the non- banking finance segment, tightening of lending norms have significantly affected the domestic sales in the last few months," TKM deputy managing director N Raja said.

He expressed hope that the upcoming festive season brings in a breather for the industry with spur in customer sentiment.

"Also, we expect the government will step in to take necessary steps for improving liquidity in the market by capital infusion in the banks...The industry also expects the GST level to be rationalised to a lower level (28 per cent to 18 per cent) to accommodate the downturn in sales," Raja said.

In the two-wheeler space, Bajaj Auto saw its domestic sales dip 13 per cent last month to 205,470 units as against 237,511 units in July 2018.

TVS Motor Company reported 15.72 per cent decline in domestic two-wheeler sales at 208,489 units last month as against 247,382 units in July 2018.

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