The company has sold 56,204 models with engine capacity upto 350cc in November 2019, a drop of 9 per cent year on year (YoY) as against 61,890 in November 2018. A total of 4,207 units of models with engine capacity exceeding 350cc were sold in November 2019, as compared to 3,854 units in November 2018, registering a YoY growth of 9 per cent.
Meanwhile, the company's total VE Commercial Vehicles (JV between Volvo Group and Eicher Motors) sales for the month of November declined 23.9 percent at 3,594 units against 4,720 units. The VECV exports were down 36.1 percent at 502 units and domestic sales were down 22.8 percent at 2,948 units over the same month last year.
In the past three months, the stock had outperformed the market by surging 45 per cent, as compared to 12 per cent rise in the S&P BSE Sensex till Friday.
RE is witnessing demand weakness for the first time since its renaissance in 2008, as it is in perfect storm with weak industry environment, substantial cost inflation and a new competitor.
“After witnessing severe headwinds over last 12 months, we expect volumes to recovery gradually from hereon. The company is now focusing on expanding its addressable market size by improving its product quality, launching new products, expanding dealerships (in sync with capacity expansion), and driving a paradigm change in its retail identity, which in turn should improve growth sustainability,” analysts at Motilal Oswal Securities said in company update.
The brokerage firm is estimating around 13 per cent decline in FY20 volumes to around 719,000 (implying residual run-rate of around 60,000/month) and around 15.6 per cent growth in FY21 to around 832,000 (v/s 826,000 in FY19). FY21 volumes should be driven by the upgraded Classic/Thunderbird and the success of the 650cc Twins in India and the export market, it added.