The new financial year (2019-20, starting Monday) seems unlikely to offer relief and sales are expected to remain in the slow lane till a post-election government takes charge. Dispatches at most companies, with the exception of a few, were either muted or fell, amid a pile of unsold stock (auto companies in India count dispatches to dealers as sales).
Cumulative sale at India's top six passenger vehicle (PV) makers dropped 0.7 per cent to 267,000 units, from 269,000 a year before. Higher cost of financing, with higher premium outgo on insurance, are among the factors weighing on buyer sentiment.
PV sales had also dropped 1.1 per cent in February, the seventh decline in eight months.
This has prompted the Society of Indian Automobile Manufacturers to say they would not be meeting even their scaled-down forecast of a six per cent rise for 2018-19.
March sales at car market leader Maruti Suzuki India dipped 0.75 per cent to 147,613 units from a year before. Led by a 6.9 per cent drop in sale of passenger cars — Baleno, Swift, Dzire and Ciaz, among other models. However, helped by the new-generation Ertiga, its utility vehicle segment grew at a brisk 12.3 per cent over a year.
In an indication of weak macro economic indicators, the growth of India's eight core sectors had slowed to 2.1 per cent in February, due to a fall in output of crude oil and refinery products.
Mitul Shah, vice president, research, at Reliance Securities, said he expected 2019-20 to see a rise in only mid-single digit for PV sale, with a slowdown till the next festive season. "Demand is expected to pick up marginally in the second half of the (financial) year as pre-buying takes effect ahead of the BS-VI emission norms from April 2020,” he said.
The sales drop was higher at other companies than Maruti.
Domestic sales at Hyundai Motor India dropped 7.6 per cent to 44,350 units over the same month a year before. Tata Motors' PV sales skid 12 per cent to 17,810 units. The company attributed it to “continued low consumer sentiment”.
New model launches, particularly of the XUV3OO, a compact SUV, helped Mahindra & Mahindra remain on a positive sales trajectory.
The maker of the Scorpio and Bolero sold 27,646 units during March, up four per cent over a year before. Honda Cars India was another exception, with sales at a fast pace on the back of new launches such as the Amaze. The local arm of the Japanese car maker saw deliveries to dealers increase 27 per cent over the same month last year.
Toyota Kirloskar Motor ended the year on a muted note. It sold 205,279 units in March, up two per cent over the past year.