Tight liquidity condition, low demand hit auto sales

New Delhi/Chennai, Tight liquidity condition and low buying sentiment dented the monthly sales of some Indian automobile manufacturers in December.

As per Maruti Suzuki India’s monthly sales figures, a total of 128,338 units were sold last month, compared to 130,066 units’ off-take recorded during the corresponding period of the last financial year.

The total sales were dragged down by heavy decline in exports which slumped by 36.4 per cent to 6,859 vehicles.

On the other hand, the company’s domestic sales rose 1.8 per cent on a year-on-year basis to 121,479 units in December.

However, Hyundai Motor India — the second largest car maker in India — reported an increase in December sales. The company registered domestic sales of 42,093 units last month, 4.8 per cent higher than 40,158 units sold in December 2017.

Auto giant Tata Motors also reported a decline in domestic sales. The company’s sales went down by 7.7 per cent to 50,440 units in the country last month, against 54,627 units sold domestically in December 2017.

“During the month, consumer sentiment remained slightly subdued as the customer was still waiting to see a sustained level of improvement in factors like fuel prices and profitability before deciding to further invest in new vehicles,” Girish Wagh, President, Commercial Vehicles Business, Tata Motors, was quoted as saying in a statement.

In the commercial vehicles segment, the company sold 36,180 units during the period under review, 10.6 per cent lower than 40,447 units sold during the corresponding period of 2017-18 financial year.

Another key Indian player, Mahindra & Mahindra (M&M), reported a meagre 1 per cent rise in its total vehicle sales for December 2018.

The total sales of the company stood at 39,755 units last month, against 39,200 units sold during the corresponding period of 2017.

The segment of medium-to-heavy commercial vehicles was the major drag as it declined 31 per cent, while in the commercial vehicles segment, the company sold 16,906 units, logging a decline of 4 per cent.

“…in domestic market, challenges relating to tight liquidity and low buying sentiment continued the de-growth in December,” said Rajan Wadhera, President, Automotive Sector, M&M.

M&M’s exports zoomed by 38 per cent to 3,065 vehicles.

Domestic sales of Japanese global car maker Toyota’s joint venture (JV) Toyota Kirloskar Motor (TKM) grew by 10 per cent in December over the same period year ago and from a 15 per cent decline in November.

Honda Cars India (HCIL) registered a growth of 4 per cent with monthly domestic sales of 13,139 units in December 2018 against 12,642 units in the corresponding month in 2017.

Additionally, two- and three-wheeler maker TVS Motor Company sold 271,395 vehicles in December, an on-year rise of about 6 per cent.

The company had sold 256,870 units in December 2017. 

In the two-wheeler segment, Suzuki Motorcycle India reported a growth of 33.82 per cent in domestic sales to 43,874 units over the 32,786 units it had sold in December 2017.

Bajaj Auto registered a growth of 18 per cent with sales increasing to 346,199 units from 292,547 units sold in December 2017.

Hero MotoCorp, however, reported a decline of 4 per cent in its total sales for December 2018 on a year-on-year basis.

The company’s sales of two-wheelers decreased to 453,985 units, compared to 472,731 units sold in December 2017.

In terms of passenger cars sales, Sridhar V., Partner, Grant Thornton India, said: “Some of the OEM’s have reported growth in performance in December based on new introductions, year-end discounts offered and the low base of December 2017. The overall numbers still are impacted by the conditions relating to financing and fuel pricing.”

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