According to the latest data released by SIAM, passenger vehicle sales in November stood at 2,66,000 units as against 2,75,440 units in the year-ago month
The passenger vehicle sales (PV) fell 3.43% last month, declining for a fourth time since July, as liquidity issues arising out of lack of funding by non-banking finance companies (NBFC), high fuel prices, poor sentiments and high interest rates dented demand.
According to the latest data released by Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales in November stood at 2,66,000 units as against 2,75,440 units in the year-ago month.
Car manufacturers had expected a better performance as Diwali, which traditionally makes for over 70% of the festive sale, fell during November. The sales had increased by 1.55% in October, which marked the start of the festive season. In July, August and September PV sales skid 2.71%, 2.46% and 5.61%, respectively.
Car sales declined marginally to 1,79,783 units last month as against 1,81,435 units in the same month last year.
SIAM director general Vishnu Mathur said things are likely to improve but it would a tough task to meet the growth forecast of 7-8% in the PV segment with just three months remaining for the current fiscal to conclude.
However, back on the strength of good monsoon, motorcycle sales during November increased 9.36% 10,49,659 units compared to 9,59,860 units a year ago.
"Three consecutive years of good monsoon have led to a strong demand coming from rural markets for motorcycles, which is driving the sales growth to a large extent," SIAM deputy director general Sugato Sen said.
Commercial vehicles sales saw a jump as well, rising 5.71% to 72,812 units in November as against 68,876 units in the year-ago month. Vehicle sales across categories rose 5.03% to 20,38,015 units from 19,40,462 units in November 2017.
Commenting on the sales figures, Sridhar V, partner, Grant Thornton India LLP, said overall vehicle sales have risen primarily based on two-wheeler sales followed by commercial vehicle sales and more so the light commercial vehicles. The PV segment, which has shown a negative growth amid festival season has been a "let down".
"But the strain is visibly caused by multiple factors, most important of which is the increase in cost of financing and the availability of financing from NBFCs," Sridhar V said.
Due to the fall in sales, rating firm Crisil has trimmed the forecast for the PV segment by 200 basis points (bps) to 7-9% from its earlier growth forecast of 9-11%.
The waiting time for popular models has come down to just a couple of weeks while face-lifts are outnumbering new model launches. Dealer inventory post-Diwali stands at 40 days this year unlike 30-35 days in the festival seasons of the past couple of years, the analysts said.
Ashish Modani, assistant V-P, corporate sector ratings, Icra, said the focus on inventory rationalisation by dealerships during festive season has taken a toll on wholesale dispatches, which declined 3.4% during November 2018. The PV sales are likely to remain tepid in the near term, with some improvement expected during the fourth quarter of this fiscal. "Demand environment from rural market remains a key sensitivity to watch out, whereas urban demand is likely to remain muted over the next few months," said Modani.
IN THE SLOW LANE
- 1,79,783 – Cars sold in November, down from 1,81,435 units a year ago
- 5.04% – Vehicle sales across categories rose on the back of motorcycles and CVs
(With inputs from PTI)
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