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Auto sales in July fall for 9th consecutive month due to poor demand

Cumulative sales of India's top five manufacturers of passenger vehicles dropped by 30.6% to 172,992 units over July last year

Shally Seth Mohile  |  Mumbai 

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Auto sales in India have been in reverse gear for 11 of the past 12 months because a slowing economy and a liquidity crisis have kept buyers from purchasing vehicles

in July continued to go down as curtailed dispatches to dealers owing to poor demand, showed the monthly sales data released by auto on Thursday.

Auto in India count dispatches to dealers as sales.

Cumulative sales of India’s top five manufacturers of passenger vehicles — including Maruti Suzuki India, Hyundai Motor India, Mahindra and Mahindra, and Toyota Kirloskar Motor — fell by 30.6 per cent to 172,992 units over the same month last year.

The sharp decline in sales, for the ninth consecutive month, has heightened the pitch for a fiscal stimulus in the form of a (goods and services tax) rate cut.

Auto companies are expected to keep a tight leash on dispatches in the months ahead even as they expect sales to recover, though marginally, with the onset of the festive season.

in India have been in reverse gear for 11 of the past 12 months because a slowing economy and a liquidity crisis have kept buyers from purchasing vehicles.

Reflecting the broad-based slowdown, domestic passenger-vehicle sales at Maruti Suzuki India fell by a sharp 36.3 per cent to 96,478 units in July over the same month a year ago — one of the steepest declines seen by the market leader in many years.

Volumes at the Indian subsidiary of the Japanese carmaker were dragged down by a sharp fall of 38 per cent in mini and compact car models, including the WagonR, Baleno, Swift, and Dzire.

Auto sales in July fall for 9th consecutive month due to poor demand

Hetal Gandhi, director (research), CRISIL, said passenger-vehicle volumes during July were estimated to have declined by Rs 27-31 per cent year-on-year. She said the fall was on account of manufacturers aligning production to demand and rationalising stocks.

Though much smaller than those of Maruti Suzuki, volumes at Hyundai Motor India dropped 10 per cent to 39,010 units over the same month last year. Sales at utility vehicle market leader Mahindra & Mahindra, too, dropped 15 per cent to 16,831 units over last year.

The trend was no different at the local arms of Toyota and Honda. While dispatches at Honda dropped by a sharp 48 per cent to 10,250 units over last year, at Toyota they were down 24 per cent to 10,423 units.

Honda attributed the drop to the high base last year, which was in turn propped up by the launch of the second-generation Amaze, which was in its third month of launch and garnered high volumes.

Honda is witnessing a lot of deferment in purchases because the July 2019 decline was more severe than the June quarter decline and that too when the industry had declined in July last year too.

CRISIL has pared its estimate of India’s gross domestic product growth by 20 basis points to 6.9 per cent for 2019-20, following a triangulation of downside risks: Weak monsoon, slowing global growth, and sluggish high-frequency data for the first quarter.

First Published: Thu, August 01 2019. 23:48 IST
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