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Domestic car sales slump continues in June; only Mahindra posts 4% growth

Combined sales of top six passenger vehicle makers dropped 16.3 per cent to 206,115 units compared to the same month a year ago

Shally Seth Mohile  |  Mumbai 

car, maruti suzuki

Automakers sent fewer vehicles for despatch to dealers in June amid poor sentiment and lacklustre demand, shows monthly sales data released by on July 1. Auto in India count despatch to dealers as sales.

Combined sales of top six passenger vehicle makers dropped 16.3 per cent to 206,115 units compared to the same month a year ago.

Led by Maruti Suzuki that sells one in every two passenger vehicles, the June quarter has been the worst historically for passenger vehicle makers. Maruti’s sales during the three-month period fell 21 per cent year on-year. This is the sharpest drop in quarterly volumes posted by the local arm of Suzuki since December quarter of 2010-11 financial year when its sales had dropped 29 per cent.

Auto firms are hoping for a favourable monsoon even as all eyes are on the Budget that is expected to announce reforms and sops to jumpstart growth.

With the exception of M&M that reaped benefits from launches like the XUV3OO and reported a 4 per cent growth in sales, most of the manufacturers reported double-digit decline in sales in June.

Veejay Ram Nakra, chief of sales and marketing, automotive division at M&M, said, “Market sentiment continued to remain subdued, especially in the passenger vehicles segment.” He attributed the growth in the segment to three recent product launches.

Mirroring the slowdown, June despatches at Maruti fell 17.2 per cent to 111,014 units as the maker of Baleno and Brezza models saw sales plummet across all the segments. Amid weak on-ground demand, it has been cautious in shipments to dealers to avoid stock-piling.

“The demand trend is tepid across major markets with inquiries to sales conversion for existing models remaining weak,” wrote Jinesh Gandhi, analyst at Motilal Oswal in a June 27 report. The average inventory levels are stable for Maruti Suzuki at 25-30 days, while it is higher for M&M and Tata Motors at 35-40 days.

“The bottom has been reached and the upturn is beginning. But we need to wait 2-3 months to say this with greater confidence,” wrote Gandhi, quoting R C Bhargava, chairman, Maruti Suzuki India.

Hyundai Motor India saw sales drop 7.3 per cent to 42,003 units over a year ago, it said.

Tata Motors saw a 27 per cent year-on-year fall in despatches. Its volumes skidded to 13,351 units against 18,213 units last year. The firm attributed it to poor customer sentiment due to liquidity crunch. “Industry continued to remain stressed; however, the market is expected to bounce back soon.”

Honda Cars India, which had managed to buck the trend in the last few months, too, was in the grip of a slowdown in June and saw sales collapse by 41 per cent to 10,314 units during the month over a year ago.

“The industry is going through its worst slowdown with continuous decline. Any initiative that can jump-start the demand will definitely be a positive for the industry,” said Rajesh Goel, senior vice-president and director, sales and marketing, Honda Cars India.

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First Published: Tue, July 02 2019. 01:32 IST
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