Economic slowdown: Automobile manufacturers report high double-digit decline in August sales
Major automobile manufacturers including Maruti Suzuki India, Hyundai, Mahindra & Mahindra, Tata Motors and Honda reported slump in sales in August
While Maruti reported a 33% drop in August sales at 1,06,413 units, sale of passenger vehicles by Tata Motors fell 58%
Similarly, Honda Cars India and Toyota Kirloskar Motor (TKM) sales dropped 51% and 21% respectively
Mahindra and Mahindra's total sales dipped to 36,085 units in August as against 48,324 units in the corresponding month last year
Auto sales in India have dropped 19 percent this year. In August, major automobile manufacturers including Maruti Suzuki India, Hyundai, Mahindra & Mahindra, Tata Motors and Honda on Sunday reported a high double-digit decline in their sales as the Indian auto sector continued to reel under one of the worst slowdowns in its history.
The vehicle industry, accounting for nearly half of India’s manufacturing output, is facing one of its worst slowdowns in nearly a decade, with vehicle sales falling rapidly. There is little sign of a swift revival, according to Reuters.
While Maruti reported a 33 percent drop in August sales at 1,06,413 units, sale of passenger vehicles by Tata Motors fell 58 percent during the month under review.
— CNBC-TV18 (@CNBCTV18Live) September 1, 2019
Similarly, Honda Cars India and Toyota Kirloskar Motor (TKM) sales dropped 51 percent and 21 percent, respectively.
Commenting on the sales performance, Tata Motors President Passenger Vehicles Business Unit Mayank Pareek said the market continued to be challenging, but the company has focused on improving its retail sales, which saw an uptick of 42 percent.
The country's largest carmaker Maruti Suzuki India reported a 32.7 percent decline in sales at 1,06,413 units in August. Domestic sales declined by 34.3 percent at 97,061 units last month as against 1,47,700 units in August 2018, it added. Sales of compact segment, including models such as Swift, Celerio, Ignis, Baleno and Dzire, fell 23.9 percent at 54,274 units as against 71,364 cars in August last year.
The auto sales downturn has put jobs across the industry at risk.
The Automotive Component Manufacturers Association of India (ACMA) said parts makers could slash a fifth of their 5 million workforce if the slump continued.
Mahindra and Mahindra (M&M) total sales dipped to 36,085 units in August as against 48,324 units in the corresponding month last year.
— CNBC-TV18 (@CNBCTV18Live) September 1, 2019
In the domestic market, sales were down 26 percent to 33,564 units last month, compared to 45,373 units in August 2018, PTI report said.
In the passenger vehicle segment, which includes utility vehicles, cars and vans, M&M sold 13,507 units last month as compared to 19,758 vehicles in the same month of 2018, a drop of 32 percent.
In the commercial vehicle segment, the company sold 14, 684 vehicles as against 20,326 units a year ago, down 28 percent.
Similarly, Honda Cars India Ltd (HCIL) domestic sales dropped to 8,291 units in August as against 17,020 units in the same month last year.
"The auto sector continues to witness high de-growth due to poor consumer sentiment," HCIL Senior Vice President and Director, Sales and Marketing, Rajesh Goel said in a statement.
This is despite the high discounts prevailing in the market which makes it the best time to buy cars, he added.
Hyundai Motor India domestic sales contracted by 16.58 percent to 38,205 units.
Toyota Kirloskar Motor too reported a decline in total sales at 11,544 units in August.
Sales in the domestic market stood at 10,701 units as compared to 14,100 units in August 2018, down 24 percent.
TKM Deputy Managing Director N Raja said, "The consumer sentiment continues to be muted in the month of August, with customers deferring their purchase of vehicles. Severe floods across states has also hurt the demand in the industry. Unfavourable exchange rate is not helping our cost."
He, however, said the recent measures announced by Finance Minister Nirmala Sitharaman to boost the auto sector with cheaper car loans, improving liquidity through credit expansion to public sector banks, deferring of one-time registration fees, higher depreciation for all vehicles and lifting ban on purchase of new vehicles in government departments are likely to spur some demand which is a much-needed relief.
--With inputs from agencies
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