june – The Wire

With Reports of Gloomy Sales Numbers, Auto Industry Woes Continue in July

Maruti Suzuki’s domestic sales drop in July was its largest in over a decade, while Bajaj Auto and M&M also reported poor numbers.

New Delhi: Most of India’s automobile and vehicle companies reported sharp drops in sales in July 2019, continuing a slump that has gone on for a large part of this year.

Maruti Suzuki, India’s biggest car maker, registered its biggest sales drop yet in 2019, with the company’s domestic sales and exports dropping 33.5% to 1,09 lakh units in July 2019 compared with 1.06 units in the same month last year.

This is the sixth straight month of declining sales for the firm. The automaker also reported a 36.3% year-on-year drop in just domestic sales at 98,210 units in July 2019 compared to 1.54 lakh units in July 2018 – the sharpest decline in over a decade.

Also read: Auto Slowdown: 286 Dealers Closed Down in 18 Months, 32,000 Jobs Impacted

According to a stock exchange notification put out by the company on Thursday afternoon, sales of mini cars comprising Alto and WagonR were at 11,577 units as compared to 37,710 units in July last year, down 69.3%.

Sales in the compact segment, including models such as Swift, Celerio, Ignis, Baleno and Dzire, were down 22.7% at 57,512 units as against 74,373 units in July last year.

Mid-sized sedan Ciaz sold 2,397 units as compared to 48 units in the same month a year ago.

Utility vehicles, including Vitara Brezza, S-Cross and Ertiga were down 38.1 per cent at 15,178 units as compared to 24,505 in the year-ago month, MSI said.

Exports in July were down by 9.4% at 9,258 units as against 10,219 units in the corresponding month last year, the company said.

M&M, Bajaj Auto too down

Mahindra & Mahindra Ltd.’s auto sales declined 15% to 40,142 units on a yearly basis last month, while its tractor sales fell 12% to 19,992 units, according to its stock exchange filing.

Bajaj Auto, on the other hand, reported its first fall in total sales in nearly two years. The company’s sales, which includes both two-wheelers and three-wheelers, fell 5% to 3.81 lakh units in July 2017, from 4 lakh units in July 2018.

Domestic sales stood at 2,05,470 units as against 2,37,511 units a year ago, down 13 percent, the Pune-based firm said in a statement.

Commercial vehicle sales any better?

The slowdown, which has affected passenger vehicle sales, also appears to have extended to commercial vehicle sales which includes trucks.

For instance, Ashok Leyland’s sales fell 28% on a yearly basis to 10,927 units in July 2018. Sales of domestic medium and heavy commercial trucks fell 47% to 4,668 units.

Also read: Passenger Vehicle Sales Down by 18% in June, Car Sales Decline by 25%

Eicher’s commercial vehicle arm also reported poor numbers, with total sales declining 32.1% on a year-on-year basis to 4,048 units.

According to data collated by Bloomberg, vehicle registrations, a key metric of sales at the dealership level, fell by 1.8% in July 2019 on a month-on-month basis and 8.2% on a yearly basis.

(With inputs from agencies)

Passenger Vehicle Sales Down by 18% in June, Car Sales Decline by 25%

Vehicle sales across categories registered a decline of 12.34% to 19,97,952 units from 22,79,186 units in June 2018.

New Delhi: Domestic passenger vehicle (PV) sales declined by 17.54% to 2,25,732 units in June from 2,73,748 units in the year-ago period.

According to data released by the Society of Indian Automobile Manufacturers (SIAM) on Wednesday, domestic car sales were down 24.97 % to 1,39,628 units as against 1,83,885 units in June 2018.

Motorcycle sales last month took the biggest hit as sale units declined from 9.57 % to 10,84,598 units as against 11,99,332 units a year earlier. In June, specifically, the total two-wheeler sales declined 11.69% to 16,49,477 units compared to 18,67,884 units in the year-ago month.

The downturn in motorcycle sales was followed by the decline in sales of commercial vehicles which were down 12.27% to 70,771 units in June against 80,670 units in the same period a year ago, SIAM said.

Also read: Can India Become the Next China for Carmakers?

In fact, all vehicle categories witnessed a decline in sales during the month.

The overall vehicle sales registered a decline of 12.34% to 19,97,952 units from 22,79,186 units in June 2018.

In the April-June period, PV sales declined 18.42% to 7,12,620 units compared with 8,73,490 units in the year-ago period while vehicles sales across all categories declined by 12.35% to 60,85,406 units against 69,42,742 units sold in the year-ago period.

(PTI)

Weak Demand in June Leads to a Slowdown for Indian Manufacturing

Manufacturing growth slowed last month with cool down in domestic consumption as optimism of future output wobbles amidst concerns over the newly implemented GST.

A worker operates a hydraulic press machine at a workshop manufacturing flanges for automobiles in Mumbai, India, May 29, 2017. Credit: Reuters/Shailesh Andrade

Activity in India’s manufacturing sector eased to a four-month low in June amid a slowdown in output and new orders as softer domestic consumption partly offset strong foreign demand, a private business survey showed on Monday.

The Nikkei India Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, fell to 50.9 in June from 51.6 in May, but still held above the 50 level that separates growth from contraction for a sixth straight month.

Factory activity has recovered since December, when it contracted for the first time in a year after Prime Minister Narendra Modi’s November 8 move to ban high-value currency notes crunched demand.

Manufacturing growth slowed last month largely as domestic consumption cooled even as external demand remained solid. The new orders sub-index – which takes into account both domestic as well as foreign demand – declined to 51.3, the lowest level since February, from 52.6 in May.

“For the third month in a row, production growth in India eased during June. The slowdown occurred due to weak client demand, with order books up at a slight and softer pace,” said Pollyanna de Lima, economist at IHS Markit.

Optimism about future output also slipped for the first time in four months as manufacturers expressed concerns about the initial impact of a goods and services tax that came into effect on Saturday.

On the brighter side, recovery in foreign demand for Indian manufactured goods helped drive export orders to an eight-month high in June, after a contraction in May.

Although manufacturers experienced reduced input cost pressures last month they did not pass on the benefits to customers.

As expectations of a normal monsoon is seen keeping food prices in check, inflation is unlikely to breach the Reserve Bank of India’s medium-term target of 4% in the near future.

That, alongside India’s economic growth slumping to a more than two-year low of 6.1% in January-March, has increased the chances of a central bank rate cut by year-end.

However, a successful implementation of the GST is expected to boost economic growth.

“With the impact of demonetisation largely over and the GST unlikely to substantially derail consumer spending, IHS Markit forecast real GDP growth to hit 7.3% for FY 17/18,” de Lima said.