NEW DELHI: Passenger car sales shrank by double digits for the third straight month in June as buyers continued to be put off by higher interest costs following the nonbank lending crisis and by rising automobile prices.The end of election uncertainty in May did not revive Motown’s spirits and the numbers could increase pressure on the Narendra Modi-led NDA government to open the purse strings in this week’s budget to spur lending and growth. Finance minister Nirmala Sitharaman will present her first budget and the Modi government’s seventh on Friday amid a sharp consumption slowdown.The motor industry estimates that passenger vehicle sales fell by about 19% to 222,000 units in June, the third straight month of double-digit declines. Vehicle sales had fallen 17% in April and 20.5% in May. 70033572 Market leaders Maruti Suzuki and Hyundai Motor India led the drop, with wholesale volumes declining by 17% to 111,014 units and by 7.3% to 42,007 units, respectively.“The elections got over towards the end of May. Demand cannot revive overnight. The budget, new policies are yet to be announced by the government,” Maruti Suzuki chairman RC Bhargava told ET. “That said, wholesale numbers do not reflect the demand on ground. If we look at retail data on a month-on-month basis, it will give a better picture of consumer sentiments.”Data with the Society of Indian Automobile Manufacturers (SIAM) shows retail sales of passenger vehicles declined by 1.28% to 264,035 units in April and by 1.46% to 270,048 units in May. The retail data for June is yet to be announced.‘No Trigger to Boost Sales’Automakers in India report wholesale dispatches to dealers and not actual sales to customers.“There has not been any specific trigger after elections to boost sales. The revival is taking longer than expected,” said Vikas Jain, national sales head at Hyundai Motor India.Bhargava added that automobile sales “normally” tend to pick up around the festive season of September-October. Maruti Suzuki has indicated that sales will grow 4-8% in FY20, with demand picking up in the second half of the year.Maruti Suzuki reported a slide in wholesale volumes across most categories in June. While sales of mini cars (Alto and old WagonR) fell 36.2% to 18,733 units, compacts (Baleno, Ignis, Celerio, Swift, New WagonR, DZire) declined 12.1% to 62,897 units. Wholesale volumes of utility vehicles decreased 7.9% to 17,797 units last month. Sales of vans dropped 24% to 9,265 units. It is only in the midsize sedan segment that the company registered a 47.1% rise in volumes at 2,322 units.At Toyota, sales fell 19% to 10,603 units. N Raja, deputy managing director at Toyota Kirloskar Motor, said the company has consciously lowered the volume of vehicles sold to dealers to minimise their burden.“We look forward to the upcoming budget to address the need for positive growth in the economy, which would result in better sentiment in the auto industry,” Raja said.“There has not been any significant trigger so far to turn around auto sales,” said VG Ramakrishnan, managing partner at Avanteum Partners. “If some stimulus is outlined in the budget, that coupled with festive demand and pre-buying ahead of implementation of BS VI emission standards will push up demand in the next 3-4 months.”Domestic auto manufacturer Mahindra & Mahindra was the only company to buck the trend and report a 4% growth in passenger vehicle sales at 18,826 units in June.“The market sentiment continued to remain subdued, especially in the passenger vehicles segment,” said Veejay Ram Nakra, chief (sales and marketing), automotive division, at M&M. “We are happy to register a growth of 4% in the passenger vehicles segment and 8% in the utility vehicles segment on the back of our three recent product launches.”In commercial vehicles, too, a revision in axle load norms that increased freight-carrying capacity, slowing economic conditions and a liquidity crunch in the market hit sales. At Ashok Leyland, sales dropped 14% to 12,085 units. Mahindra registered a 15% decrease in sales at 16,394 units. VE Commercial Vehicles, the joint venture between Volvo Group and Eicher Motors, saw volumes crash by 24.6% to 4,203 units.In the two-wheeler segment, Pune-based Bajaj Auto registered a 4% increase in motorcycle sales (domestic and exports) at 351,291 units in June. Two-wheeler sales at TVS Motor Company dropped 5.9% to 283,461 units.
from Economic Times https://ift.tt/2XlBkbD
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