Car sales drop again after festive season; industry pins hope on Dec demand

Sales of passenger vehicles in November declined after increasing in the previous month, strengthening industry fears that the short-term cheer was only due to the festive season’s offers.

The numbers reported by companies showed that sales of four- and two-wheelers slid by almost 8 per cent. 

Wholesale volumes represent vehicles dispatched from factories to dealers in India and overseas.

“After an encouraging festival period, in November the industry declined sharply. In addition, it is preparing for the Bharat Stage VI transition. In line with our strategy to focus on retail, we have further enhanced our network coverage,” said Mayank Pareek, president, passenger vehicles business unit, Tata Motors.

For instance, market leader Maruti Suzuki India (MSIL) reported sales of 150,630 passenger vehicles in the domestic market in November, down 1.9 per cent over 153,539 units in the corresponding month last year.

Sales of mini cars, comprising the popular entry-level models like the Alto and WagonR, stood at 26,306 units, compared to 29,954 units in the same month last year.

Industry executives had cautioned that the slight revival witnessed primarily during the 15 days of Navratri and Dhanteras was not a barometer to check demand, and things could be back to worse because most of the issues affecting demand for cars and two-wheelers still persisted.

However, Hyundai Motor India (HMIL), the country’s second-largest maker of passenger cars, reported growth with 44,600 units in November, against 43,709 units in the corresponding month last year. “Hyundai registered cumulative growth of 7.2 per cent with 60,500 units in November on account of improved demand in the domestic and export markets. Despite ongoing market challenges, the firm showcased good performance by the Grand i10, Nios, Venue, Creta, and Elite i20,” said Vikas Jain, national sales head, HMIL.

However, the industry expects things might change in December with another rush of positive sentiment from buyers when the marriage season picks up.  “The month, after the festive season, is historically a lean month for the automotive industry. Consumer demand, especially for passenger vehicles, typically picks up in the year-end, that is December. Therefore, we expect December to pan out better for the automotive industry,” said Veejay Ram Nakra, chief of sales & marketing, automotive division, Mahindra & Mahindra (M&M).

The company reported a 9 per cent year-on-year decline in its wholesale volumes in November. Its sales of passenger vehicles and commercial vehicles stood at 41,235 units in November, against 45,101 units in the year-ago period. Domestic volumes in this category fell to 38,614 units, while exports were 2,621 units.

That the rural economy is yet to show signs of recovery is evident from M&M’s numbers in the farm equipment sector. Domestic tractor volumes fell 19 per cent to 20,414 units. Rajesh Jejurikar, president, farm equipment sector at M&M, however, remains optimistic on the recovery in tractor volumes in the coming months. “With government support on agriculture and the rural sector and healthy reservoir levels due to the above-normal monsoon, we expect good rabi output in the coming months,” said Jejurikar.

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