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Top carmakers post double-digit fall in domestic sales in April

Maruti Suzuki India Ltd reported a 17.2% fall in its wholesale figures

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Country's largest carmaker Maruti Suzuki India Ltd (MSIL) reported a decline of 17.2% in its wholesale figures, indicating that the slump in the automobile industry continued in April.

The vehicle manufacturers expect the sales to get impacted further during the year due to volatility in fuel prices and increase in car prices owing to new regulations and stricter inventory control for a smooth switchover to the BS-VI regime by year-end.

MSIL sold 143,245 units in April 2019, which included 1,33,704 units in the domestic market, 364 to other original equipment manufacturers (OEMs) and rest were for exports, the company said in a regulatory filing. The company had sold 1,72,986 units in April last year.

Its domestic sales declined 18.7% to 1,34,068 units last month as against 1,64,978 units in the year-ago month, it added. Sales of minicars comprising Alto were at 22,766 units as compared to 37,794 units last year, down 39.8%. Sales of compact segment, including models such as Swift, Celerio, Ignis, Baleno and Dzire, were down 13.9% at 72,146 units, the company said. Likewise, mid-sized sedan Ciaz sold 2,789 units as compared to 5,116 units in the same month a year ago. Utility vehicles, including Vitara Brezza, S-Cross and Ertiga were up 5.9% at 22,035 units. On the other hand, exports in April were up by 14.6 % at 9,177 units.

Rival Hyundai posted a decline of 10.1% in domestic sales. The country's second-largest car manufacturer and number one exporter since inception registered the domestic sales of 42,005 units and exports of 16,800 units with cumulative sales of 58,805 units for the month of April 2019.

However, Honda Cars India Ltd (HCIL) reported a 23% increase in domestic sales at 11,272 units in April as against 9,143 units in the same month last year. The company's April sales growth is primarily due to lower base effect, as there was no 'Amaze' in the corresponding month last year during model runout, HCIL senior vice president and director, sales and marketing Rajesh Goel said. The ongoing elections and overall subdued market sentiment continue to affect the sales momentum, he added.

"Going forward, the industry is heading towards a tougher year impacting sales due to volatility in fuel prices, increase in car prices owing to new regulations and stricter inventory control for smooth switchover to BS-VI regime by year-end," added Goel.

In the two-wheeler segment, Royal Enfield reported a 17% fall in total sales at 62,879 units in April. The company had sold 76,187 units in April 2018, Eicher Motors said in a statement. Domestic sales declined 21% to 59,137 units in April as against 74,627 units in the year-ago month, it said. Exports during the month under review surged 140% to 3,742 units.

The company said its manufacturing facilities at Oragadam and Vallam Vadagal in Tamil Nadu, which underwent scheduled maintenance between April 22-30, have resumed normal operations from May 1.

Suzuki Motorcycle India (SMIPL) witnessed a 12.57% increase in total sales at 65,942 units in April. The company had sold 58,577 units in April last year, SMIPL said in a statement. Domestic sales grew by 9.25% to 57,072 units in April as against 52,237 units in the year-ago month, it added.

Commenting on the sales performance, SMIPL vice president, marketing, sales, and after-sales Devashish Handa said, "Given the depressed industry sentiment, this is a great start of the new financial year for Suzuki Motorcycle India and we are poised for a strong performance in 2019-20, aiming to achieve one million sales target." The company's focus in this fiscal year "is also to strengthen our dealer network and product portfolio with the addition of new premium products to our stable catering to a larger customer base," he said.

In the commercial vehicle segment, VE Commercial Vehicles Ltd, a joint venture between Volvo Group and Eicher Motors, reported sales of 3,961 units in April, nearly flat on-year. The company had sold 3,960 units in April 2018, VE Commercial Vehicles (VECV) said in a statement.

Eicher-branded trucks and buses recorded total sales of 3,882 units in April as compared with 3,940 units in the year-ago month, down 1.47%.

In the domestic market, sales of Eicher-branded trucks and buses were at 3,663 units last month, up 8.05%.

A Mumbai-based analyst with a global consulting firm said, "It has been a really long period of stress for the automobile sector. Traditionally, the sales always remain down during the elections. I believe things to improve later during this fiscal."

The experts claim that the Indian auto sales are experiencing a prolonged slowdown as the market has already seen eight months of slowing sales and growth reversal and positive triggers in the near term appear few.

According to the executives across the OEMs, retailers and component makers, one of the primary reasons for slowdown has been the tightening of liquidity by non-banking financial institutions following the IL&FS crisis. The other prominent reasons include the rise in fuel prices, rural distress due to lack of rains in certain regions of the country, severe floods in Kerala during August last year, new insurance laws leading to increase in its costs and slowdown in certain industries leading to dip in consumer sentiments.

MAJOR BUMP

  • Maruti Suzuki India Ltd reported a 17.2% fall in its wholesale figures
     
  • Sales of minicars comprising Alto fell 39.8%

(With inputs from PTI)

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