Slowdown blues: Auto sales down 23.5%, worst slump in two decades

Passenger vehicle sales in the country declined for the 10th straight month as carmakers resisted increasing inventories at dealerships, signalling that it would be a muted festive season this year.

Domestic sales of passenger vehicles fell 31.6 per cent year-on-year to 196,524 units in August, according to the data released by the Society of Indian Automobile Manufacturers (Siam). That’s the steepest decline since 1997-98 when Siam started recording data.

Two-wheeler sales — a key barometer of the rural economy — also dropped by 22.24 per cent to 1,514,196 units against 1,947,304 units in the same period last year. Companies, wary of piling inventory, resorted to holding onto their stock. They also cut production, which led to a decline in dispatch to dealers.

Dispatches in the passenger vehicles (PV) segment during the month declined. Previously, the steepest decline in the segment was registered in July this year when wholesale figures had fallen 30.98 per cent to 200,790 units. The fall in PV sales in August was also the 10th consecutive month of decline. In fact, all vehicle categories witnessed decline in sales during the month.

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In the PV segment, market leader Maruti Suzuki India posted 36.14 per cent decline in its August sales at 93,173 units. Hyundai Motor India also witnessed 16.58 per cent fall at 38,205 units while Mahindra & Mahindra saw a drop of 31.58 per cent at 13,504 units during the month.

Siam said passenger car sales in August were also the worst ever. Last month, domestic car sales were down 41.09 per cent at 1,15,957 units against 1,96,847 units in August 2018. Commercial vehicle sales were down 38.71 per cent to 51,897 units in August compared with 84,668 units in August 2018.

Similarly, motorcycle sales last month declined 22.33 per cent to 9,37,486 units against 12,07,005 units a year earlier. Scooter sales declined by 22.19 per cent to 520,898 units compared with 669,416 units in August last year.

In the two-wheeler category, Hero MotoCorp registered a 20.97 per cent drop in sales at 524,003 units, while rival Honda Motorcycle and Scooter India saw sales decline by 26.26 per cent to 425,664 units.

Similarly, Chennai-based TVS Motor Company saw its sales slump by 20.37 per cent at 219,528 units in August.

On the other hand, retail sales data for August showed a somewhat better picture in terms of sales, pointing to inventory correction taking place in the industry. Total automobile sales declined by 4.15 per cent to 1,600,376 units as compared with 1,669,751 units in August 2018, according to the Siam data.