Fuel, Interest Cost Dent April Auto Sales; Honda Only Carmaker to Register Growth
Beginning of FY20 for the auto sector has been on a negative note across passenger cars and commercial vehicles.
(Image: AFP Relaxnews)
High interest and fuel cost along with liquidity constraints continued to subdue sales of Indian automobile companies in April. Automobile major Maruti Suzuki India's overall sales including exports for April declined by 17.2 per cent to 143,245 units from 172,986 units' off-take recorded during the corresponding period last year.
The company's domestic sales decreased 18.7 per cent on an year-on-year basis to 134,068 units in April. Although the domestic passenger vehicle sales was lower by 19.6 per cent to 131,385 units on a YoY basis, the company's sales of light commercial vehicles in the country rose 50.2 per cent to 2,319 units.
The automobile major's exports zoomed by 14.6 per cent in April to 9,177 units from 8,008 units, which were shipped out during the corresponding month of last fiscal.
Similarly, Hyundai Motor India's overall sales including exports declined marginally by 1.6 per cent.
The company's overall sales during the month under review declined to 58,805 from 59,744 units sold during April 2018.
Additionally, domestic sales during the month under review edged lower by 10.1 per cent to 42,005 units from 46,735 units sold during the corresponding period of 2018. However, the company's exports went up by 29.1 per cent to 16,800 units from 13,009 units shipped abroad in April 2018.
On its part, Tata Motors reported a drop of 20 per cent in April commercial and passenger vehicles sales in the domestic market which declined to 42,577 units from 53,511 units sold in the same period last year.
The company said weak consumer sentiment continued to hamper sales. Segment-wise, domestic sales of the company's passenger vehicles witnessed a decline of 26 per cent at 12,694 units, as compared to 17,235 units sold in the like period of last year.
"The on-going general elections also impacted demand generation in the market," the company said in a statement.
In the commercial vehicles segment, its domestic sales declined by 18 per cent in April to 29,883 units from 36,276 units sold during the corresponding period of 2018.
Another automobile major Mahindra & Mahindra (M&M) reported a 9 per cent fall in its overall sales to 43,721 vehicles in April as against 48,097 units sold in the year-ago month.
Commenting on the month's performance, Rajan Wadhera, President, Automotive Sector, M&M said: "The ongoing elections has subdued the purchase sentiment during April. This, according to us, is a temporary phenomenon.
"We believe, following the elections the auto industry will see a revival in consumer demand. Supported by a normal monsoon, we are confident of seeing higher sales in FY20."
Exports for April 2019 declined by 26 per cent to 2,118 units from 2,880 units shipped abroad during the corresponding period of last year.
In the two-wheeler segment, Honda Motorcycle & Scooter India's total sales in April 2019 stood at 467,910 units which includes domestic sale of 432,756 units and exports of 35,154 units.
Suzuki Motorcycle India reported a growth of 12.57 per cent in its overall sales to 65,942 units over 58,577 units sold in April 2018.
Hero MotoCorp, however, reported sales of 574,366 units down from 694,022 units sold during a year-ago period.
In terms of passenger cars and commercial vehicles segment, Sridhar V., Partner, Grant Thornton India, said: "Beginning of FY20 for the auto sector has been on a negative note across passenger cars and commercial vehicles.
"Passenger cars sales have de-grown in FY20 both on YoY and sequential basis -- a clear indication of sentiments continuing to be down since last two quarters of the previous FY along with high interest cost, fuel price and price hike by OEMs."
Rahul Mishra, Principal, A.T. Kearney, felt: "The overall sales trend is an indicator of broader industry sentiment and weak demand.
"The outlook for the rest of this year does not signal a very drastic turnaround -- weak demand, rising fuel prices, shift towards shared mobility, along with inventory controls and price escalations due to BS-VI transition are all challenges."
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