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Auto sector reports sluggish June sales

DECCAN CHRONICLE. | MICHAEL GONSALVES
Published Jul 2, 2019, 12:53 am IST
Updated Jul 2, 2019, 12:53 am IST
Tractors, trucks & cars skid; Maruti Q1 sales dip 21%
Sales of tractors at Mahindra fell 19 per cent in June at 31,879 units, down from 39,277 units a year ago.
 Sales of tractors at Mahindra fell 19 per cent in June at 31,879 units, down from 39,277 units a year ago.

PUNE: The sales of tractors, heavy commercial vehicles and passenger vehicles were down in June, indicating a slowdown in economic activity, with automakers now banking on badly needed stimulus in the Budget on Friday.

Sales of tractors at Mahindra fell 19 per cent in June at 31,879 units, down from 39,277 units a year ago.

 

Even for Q1 of FY20, Mahindra’s tractor sales dipped 15 per cent at 82,913 units, down from 97,360 it sold in the year-ago period.

“Tractor demand remain-ed sluggish in June. We hope that the onset of monsoon and the upcoming Union Budget allocations to the rural and agri sectors will drive positive sentiment in the coming months,” Rajesh Jejurikar, President, Farm Equip-ment at M&M said.

Sales of Mahindra’s med-ium and heavy commercial vehicles (M&HCV) also fell a steep 36 per cent at 705 units last month against 1,108 units last year. Also, in the April-June period, sales dropped 43 per cent at 1816 units, from 3,164 units it sold last year.

 

Sales of M&HCV at Tata Motors, India’s biggest CV maker, also fell 19 per cent last month at 9,358 units.

The demand for M&HCV cargo vehicles remained low with the excess carrying capacity created with the higher axle load regulation last year, the firm said.
Operators are facing viability challenges due to low freight availability and falling freight rates, it  said.

The usually afloat tipper segment has also weakened; tipper sales fell by 12 per cent year-on-year, over slowdown in the execution of existing infrastructure projects, delayed payments to contractors and lack of new projects, the company pointed out.

 

“Both M&HCV and the small commercial vehicle segment has been hit by poor consumer sentiment, falling freight rates and difficulty of funding from NBFCs with a respective decline of 19 per cent and 10 per cent,” Girish Wagh, President, Commercial Vehicles at Tata Motors, said.

The carmakers have also been hit hard, with buyers refusing to open their purse strings to buy their dream cars yet.

Maruti Suzuki, India’s top car maker and Hyun-dai, the second biggest car maker, which together command nearly 70 per cent of the car market, reported slower sales in both June and the Q1 of FY20. Tata Motors, Toyota Kirloskar and Honda Cars were no better.

 

The only silver lining came from M&M, India’s biggest utility vehicle maker, which last month sold 4 per cent more passenger vehicles, led by the XUV 300.
Sales at Maruti Suzuki fell 17.20 per cent at 111,014 units in June. This is the lowest in Q1, when the firm sold 131,385 units (-19.6 per cent) in April and 121,018 units (-25 per cent) in May. Its sales fell 20.80 per cent in Q1 at 363,417 units.

In the first quarter of April-June, sales of the bread-and-butter Alto and old Wagon R fell a whopping 44.90 per cent at 57,893 units. The sales of the set of six compact cars such as new Wagon R, Celerio, Ignis, Swift, Baleno and Dzire dropped 11.80 per cent at 205,178 units while the premium Ciaz fell 18.80 per cent at 8,703 units.

 

Its utility vehicles, once a powerhouse of growth led by the Vitara Brezza, were also down by 10.30 per cent at 58,984 units and the Omni and Eeco vans at 32,659 units, are down 27 per cent year-on-year.

Hyundai also posted 7.30 per cent sales decline last month at 42,007 units. Sales at Tata Motors also dropped 27 per cent at 13,351 units. The cumulative sales in April-June 2019 were at 36,945 units, a drop of 30 per cent.

Sales at Honda Cars also fell 40 per cent last month.

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