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Reverse Gear: Festive Season Fails To Boost Auto Sales


12 November 2019

OMMCOM NEWS


New Delhi: Despite the traditional uptick in sales during the festive season, the slump in the domestic automobile sector continued unabated in October with the overall sectoral off-take plunging 12.76 per cent.

On Monday, data furnished by the Society of Indian Automobile Manufacturers (SIAM), showed that the Indian automobile sector's total sales declined by 12.76 per cent to 2,176,136 units in October from 2,494,345 units sold during the corresponding month of the previous year.

The data assumes significance as it showed that an expected up-tick in wholesales on the back of the festive season did not materialise.

Other reasons such as low rural demand along with a slowdown in economic activity have been cited for the de-growth.

After nearly 12 months of de-growth, the passenger vehicles sales, however, turned flattish. The off-take during the month under review inched-up by 0.28 per cent to 285,027 units this October, on a year-on-year basis.

SIAM President Rajan Wadhera told reporters that healthy PV retail sales have been reported and that the coming months of November-December are expected to be better than the corresponding period of last year.

Significantly, the current figures are only wholesale numbers and not retail data.

Wadhera also said the industry has requested the state-run oil marketing companies to provide BS-IV emission norms compliant fuel by February 1, across the country.

At present, the fuel type is only available in the Delhi-NCR region.

In terms of passenger cars' sales de-grew by 6.34 per cent to 173,649 units. In September, sales were down 33.4 per cent.

But the utility vehicle sales grew by 22.22 per cent to 100,725 units, whereas vans' off-take went down by 35.08 per cent to 10,653 units against that in the same month a year ago.

Wadhera cited the entry of new players and products in the utility vehicle segment as the core reason for the rise in sales.

On the other hand, the key indicator of economic activity -- commercial vehicle -- segment's sales were down by 23.31 per cent to 66,773 units.

The sale of three-wheelers in September declined by 3.60 per cent to 66,985 units.

In the case of two-wheelers, which include scooters, motorcycles and mopeds, the sale edged lower by 14.43 per cent to 1,757,264 units.

However, exports across categories were higher by 2.72 per cent at 395,964 units.

The sales decline has also dented production levels, causing job losses. The domestic passenger car production has fallen by 30.22per cent to 162,343 units from 232,649 units.

Besides, commercial vehicle production has come down by 45.48 per cent to 58,957 units, and two-wheeler production has edged lower by 26.57 per cent to 1,725,462 units.

"Festival mood, discounts, financing push and new introductions have contributed to a seemingly revival like atmosphere in passenger car sales though one will have to pass the next two months, usually represented by weak sales, to confirm turnaround," Grant Thornton India LLP Partner Sridhar V. told IANS.

"The rate of decline has slowed down this month, if one were to look at YoY sales for the previous few months. Sequential sales have shown significant improvement in close to 27 per cent growth foe passenger cars. This has come more from SUV sales."

(IANS)