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Automobile industry sees 3% decline in December sales on slow dispatches

Sales of passenger vehicles (cars, vans and utility vehicles) slipped by 0.43 per cent to 238,692 units, the fifth monthly decline since July 2018.

Ajay Modi  |  New Delhi 

Automobile industry sees 3% decline in December sales on slow dispatches

It was an unusual December for the domestic Sales across segments — passenger vehicles (PV), commercial vehicles (CV), two- and three-wheelers — declined in the last month of the calendar year as manufacturers went slow on dispatches to correct high inventory at dealerships. The overall industry reported a 3 per cent decline in dispatches to dealerships with a total volume of 1.61 million vehicles. The industry had posted 36 per cent growth in December 2017.

Sales of passenger vehicles (cars, vans and utility vehicles) slipped by 0.43 per cent to 238,692 units, the fifth monthly decline since July 2018. Manufacturers reduced wholesale dispatches to cut inventory pile-up after a tepid festive season.


Within the PV segment, dispatches of cars declined 2 per cent to 155,159 units. Utility vehicle sales also slipped over 2 per cent to 65,506 units. Vans, the smallest sub-segment in PV, grew at 26 per cent to 18,027 units. As festive season selling did not happen this year (2018) around, stocks at dealer level went up considerably. It required a correction so automakers made adjustments during December,” Siam President Rajan Wadhera said. With reduced dispatches and discount driven brisk retail sales during the month, the situation is now normal with inventory levels reduced to 30-35 days from the earlier levels of 45-50 days, he said. Issues like high fuel prices, lack of finance and credit options led to decline in sales in the third quarter, Wadhera said. “With fuel prices coming down, buyer sentiments have now started to turn positive and we expect the fourth quarter to be better in terms of sales,” Wadhera said, adding 2019 is going to be a “year of growth”. For the calendar year 2018, PV sales grew 5.08 per cent to 3.39 million units.

According to Siam, total two-wheeler sales in December fell 2.23 per cent to 1.25 million units, compared with 1.28 million units in corresponding month of 2017. India saw 0.60 per cent growth in motorcycle sales to 793,061 units in December. Scooter sales declined 6.08 per cent to 406,137 units, compared with 432,427 units in December 2017. Two-wheeler sales in calendar year 2018 grew almost 13 per cent to 21.64 million units.

Sales of CV were down 7.8 per cent to 75,984 units in December, Siam said. With the segment, sales of medium and heavy commercial vehicles softened by 21 per cent to 31,299 units.

Dispatches of light commercial vehicles grew 4 per cent to 44,685 units. During the calendar year, sales of the CV segment grew 27 per cent to a record million units.

Sales of three-wheelers slipped by 23 per cent to 43,650 units. Vehicle sales across categories registered a decline of 3 per cent to 1.61 million units, Siam data showed. “The year-end discounts have helped show some recovery despite an overall decline in December 2018. Little bit of easing of funding and favourable fuel price levels can improve sentiments in the January-March quarter,” said Sridhar V, partner at Grant Thornton India LLP.

Automobile industry sees 3% decline in December sales on slow dispatches

First Published: Mon, January 14 2019. 22:32 IST
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