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  • 4 декабрь 2018
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The decline in wholesales is the result of the poor

The decline in wholesales is the result of the poor festive sales and high inventory at the dealership. Moreover, the slow down in passenger vehicles sales is because of the high base in the year-ago period

The decline in wholesales is the result of the poor
NEW DELHI: Weak buyer sentiment due to high insurance cost, vehicle price hike and liquidity crunch in the NBFC sector continue to hit domestic passenger vehicle demand in November 2018. With a marginal growth of less than one percent, the overall passenger vehicle market remained flat for the fifth straight month.

The decline in wholesales is the result of the poor festive sales and high inventory at the dealership. Moreover, the slow down in passenger vehicles sales is because of the high base in the year-ago period, according to a Nomura research report.

Federation of Automobile Dealers Associations (FADA), a body representing automobile retailers say that the total vehicle sold in 42-day long festival period was at 20,49,391 units compared to 23,01,986 units in last year's festive season. Seeing an overall decline of 11 percent.

"Retail sentiments for Cars and UVs continue to remain subdued post the festive season. Maruti, Hyundai and Mahindra's sales figures for this segment during November are muted. High cost of ownership and a lack of major model launches continues to drag growth for the passenger car and utility vehicle industry. Inventory levels post Diwali too remained high (40-45days) and were also a key reason for sub-par wholesale sales." said Hetal Gandhi, Director, CRISIL Research

While the major car makers saw a decline or flat growth in November, two-wheelers too face the heat of the adverse effects of macroeconomic factors. Similarly, commercial vehicle segment also saw a decline for the first time in this year.
OEMs
Nov-18
Nov-17
% growth
Passenger Vehicles
Maruti Suzuki
1,43,890
1,44,297
-0.3
Mahindra & Mahindra
16,188
16,030
1
Toyota Kriloskar Motors
10,721
12,734
-16
Ford India
6,375
7,777
-18.02
Tata Motors
16,982
17,157
-1.01
Honda Cars India
13,006
11,819
10
Two Wheelers
Hero Moto Corp
6,10,252
6,05,270
0.8
TVS Motors
53,058
42,722
24.19
Suzuki Motorcycle
53,058
42,722
24.19
Commercial Vehicle
Tata Motors
33,488
35,307
-5.15
Mahindra &Mahindra
19,673
15,554
26
Ashok Leyland
13,121
14,457
-9
Passenger Vehicles

India's leading passenger vehicle manufacturer Maruti Suzuki saw a marginal growth of 0.5 percent in the month of November at 146,018 units. However, the overall domestic passenger vehicle sales including exports went down by 0.3 per cent at 143,890 units last month as compared to 144,297 units same month year ago.

Similarly, Mahindra & Mahindra passenger vehicle unit recorded a marginal growth of 1 percent at 16,188 units in November 2018 as compared to 16,030 in the same month the previous year.

Rajan Wadhera, President, Automotive Sector, M&M Ltd. said, “Adverse macroeconomic conditions have impacted the growth forecast for the automotive industry in general."

He further added, "going forward, we hope that the decrease in fuel prices and improving liquidity will drive demand for passenger vehicles. At Mahindra, we remain upbeat due to our new product launches of Marazzo, Alturas G4 and the upcoming launch of our new SUV codenamed S201.”

The Indian joint-venture subsidiary of the Japanese automaker, Toyota Kirloskar Motor sold a total of 10721 units in the domestic market in November 2018. Seeing a decline of 16 percent, the company sold a total of 12734 units in the same month last year.

Commenting on the monthly sales, N. Raja, Deputy Managing Director, Toyota Kirloskar Motor said, “Consumer demand has witnessed a downward trend over the festive period as compared to the same period last year. We are trying to maintain lean inventory at the dealership to avoid stock pile up. The festive season has not been able to usual spur in customer demand.

With the new year around the corner, we hope there will be a positive momentum in the buying sentiments ensuring growth in year-end sales. We would like to extend our gratitude to our loyal customers who have been appreciating our products time and again.”

On a similar note, the American car manufacturer Ford India saw a decline of 18.02 percent at 6375 units in the month of November 2018, when compared to 7777 units in the same month last year.

Anurag Mehrotra, President & Managing Director, Ford India said, “With consumer sentiment continuing to be low due to the general economic situation, we expect continued volatility in fuel prices and inflation to cause headwinds for the passenger vehicle industry.”

Home-grown automaker, Tata Motors passenger vehicle unit witnessed a decline of 1.01 per cent to 16,982 units, as compared to 17,157 units sold in November 2017.

According to the company, November 2018 was a challenging month for the industry with muted consumer sentiment caused by a liquidity crunch, non availability of retail finance and moderate festive season".

The Indian subsidiary of the Japanese car manufacturer, Honda Cars India Ltd. (HCIL), registered a growth of 10% with monthly domestic sales of 13,006 units in November 2018 against 11,819 units in the corresponding month last year. HCIL also exported a total of 543 units in November 2018.

Rajesh Goel, Sr. Vice President and Director, Sales and Marketing, Honda Cars India Ltd said, “While the overall auto industry’s growth has remained muted, HCIL could register 10% growth last month. This is largely due to Diwali which happened in November this year as compared to being in October last year along with continued good performance of All New Amaze and robust sales of models like City & WR-V. Our consumer offers were also very attractive.”

Two Wheelers

India's largest two-wheeler manufacturer, Hero MotoCorp reported a marginal increase of 0.8 per cent in sales at 610,252 units in November 2018. The company had sold 605,270 units in the corresponding month last year.

However, the Japanese two-wheeler manufacturer Suzuki Motorcycles posted a double-digit growth of 24.19 per cent at 53,058 units when compared to 42,722 units sold in November 2017.

Satoshi Uchida, Managing Director, Suzuki Motorcycle India said, “The consistent double-digit growth that we have maintained in November as well, is a testimony to consumer trust that Suzuki enjoys in India. We are confident of carrying forward this momentum into the coming months as well, and achieve our sales target of 7.5 lakh units in FY18-19.”

Home-grown automaker, TVS sales grew 28 per cent at 260,253 units in the last month as compared to 203,138 units in November 2017.

Commercial Vehicles

For the first time since May 2017, the commercial vehicle segment is seen under pressure largely owing to higher interest rates, fuel prices and muted demand post festive season.

India's largest commercial vehicle manufacturer, Tata Motors sales declined 5.15 per cent in November to 33,488 units compared to 35,307 sold last November.

"Small operators' profitability was also impacted due to reduced freights on account of the benefits passed by large operators from the GST related credit. Overall demand post the festival period was muted," the company said in a press statement.

Even the second largest commercial vehicle manufacturer, Ashok Leyland reported 9 per cent decline in its total sales at 13,121 units in November 2018. The company dispatched 14,457 units in November 2017, Ashok Leyland said in a release.

Commercial Vehicles segment of Mahindra & Mahindra sold 19,673 vehicles in November 2018, registering a 26% growth when compared to 15554 units in the same month last year.

(Disclaimer: This report has been prepared based on the sales results announced by the companies until the time of publication. We will keep updating as other companies post their results)

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