Indian automotive wholesale continued to be in the red in February 2019. Several manufacturers, including Maruti Suzuki and Honda Motorcycles, have resorted to production cuts to manage the inventory build-up with the dealerships across the country.
According to the data of the Society of Indian Automobile Manufacturers (SIAM), factories in India sent off 2,034,768 units in February 2019 compared to 2,111,804 units in the same month in 2018, registering a decline of 3.65 percent.
According to Sugato Sen, Deputy, Director General, SIAM, owing to elections the automobile demand will remain subdued in the coming months.
The passenger vehicle wholesales slipped marginally by 1.11 percent to 272,284 units in February 2019 as against 275,346 units in the corresponding month in the previous year. Passenger vehicle production was lower by five percent in February 2019. In this month passenger car wholesales fell by 4.3 percent to 171,372 units. At the same time utility vehicle wholesales grew by 3.7 percent to 83,245 units and the dispatch of vans increased by 10.7 percent year-on-year to 17,667 units.
Maruti Suzuki India reported a marginal increase of 0.9 percent year-on-year in its domestic wholesales to 139,100 units in February 2019 as against 137,900 units in February 2018. The newly-launched Wagon R, despite heavy discount, could not garner major volume. Maruti Suzuki’s exports also witnessed a decline of 19.6 percent to 9,582 units in February 2019 compared to 11,924 units in February a year ago. The company, however, saw a marginal decline of 0.8 percent in its total sales (domestic and exports) at 148,682 units in February 2019 as against 149,824 units sold in the corresponding month last year.
Wholesales of Hyundai Motor India also declined by 3.1 percent in February 2019 to 43,110 units as against 44,505 in the same month last year. The company’s exports were up 4.5 percent to 11,408 units as against 10,917 units a year ago.
Tata Motors saw a drop of three percent in wholesales at 57,221 units (all categories) in February 2019 as against 58,993 units sold in February 2018. PVs grew by two percent to 18,110 units, compared with 17,771 units sold in the same month last year.
Toyota Kirloskar Motor (TKM) total sales (domestic and export) went down by 1.63 percent in February 2019 to 12,497 units as against 12,705 units in the same month last year.TKM sold a total of 11,760 units in the domestic market last month as compared to 11,864 units in February. N Raja, Deputy Managing Director, TKM, said, “We have seen better consumer sentiment than in January leading to a growth in demand. However, the auto sales are witnessing a temporary slowdown in the pre-election phase in addition to factors like tight liquidity condition impacting the buying behaviour.”
Honda Cars India Ltd (HCIL) had a growth of 16 percent in domestic wholesales at 13,527 units in February 2019 against 11,650 units in the same month in 2018. Rajesh Goel, Senior Vice President and Director, Sales and Marketing, HCIL, said, “Our on-ground efforts and sustained sales momentum for models, specially the Amaze, City and WR-V have fuelled our growth in February. The overall market sentiment is not buoyant at this stage. However, we hope the market will revive soon.”
Mahindra & Mahindra Ltd (M&M) wholesales stood at 52,915 units in February 2019, compared to 48,473 units in February 2018, a growth of nine percent. In this month this year its total sales, including exports, touched 56,005 vehicles as against 51,127 vehicles in the same month in 2018, a growth of 10 percent.
The Passenger Vehicles segment dispatch of M&M stood at 26,109 units in February 2019, as against 22,389 units in February 2018, reporting a growth of 17 percent. Rajan Wadhera, President, Automotive Sector, M&M Ltd, said, “February has augured well for Mahindra. We have witnessed a strong double digit growth of 16 percent in our UV portfolio, supported by our newly-launched XUV300 model. The overall growth for the month has been around 10 percent. “We have shown an overall strong growth of 12 percent.”
Two-wheelers, a segment that had a heavy inventory backlog, witnessed 4.2 percent decline in wholesales at 1,615,071 units in February, 2019 as against 1,686,180 units in the same month a year ago. Showing urban distress, the scooter wholesale dipped by 12.1 percent to 492,584 units in February 2019 as against 560,653 units in the same month a year ago. Motorcycle wholesale fell marginally by 0.5 percent to 1,047,486 units from 1,053,596 units.
Hero MotoCorp reported 1.96 per cent decline in total sales to 6, 17,215 units in February, 2019 as against 629,597 units in the same month last year. “In order to provide impetus to the market, Hero MotoCorp is set to launch a slew of new products – including scooters and premium motorcycles – in the coming months,” the company sources said. The company expects demand growth on account of increased liquidity in the market through government schemes and various measures taken by the manufacturers to boost retail sales. “The demand growth can be stimulated if the GST rate on two-wheelers is reduced to 18 percent from the present 28 percent,” the company said.
Eicher Motors-owned Royal Enfield reported a dip of 16 percent in its domestic sales to 60,066 units in February 2019. The domestic dispatches stood at 71,354 units in February 2018, the company said in a statement. Its total sales (domestic+ overseas) saw a decline of 14.3 percent to 62,630 units in the month under review against 73,077 motorcycles dispatched in the same month last year. The company has also recently announced its first subsidiary outside India in Thailand.
TVS Motor Company’s total two-wheeler sales reported an increase of two percent to 285,611 units in February 2018, up from 280,942 units in February 2018. Domestic two-wheelers registered sales of 231,582 units in February 2019 as against 230,353 units in the corresponding month last year.
Commercial vehicles wholesale in February 2019, declined by 0.4 percent to 87,436 units in February 2019 as against 87,815 units in the same month last year.
M&HCV segment contracted 8.7 percent to 34,295 units in February 2019 compared to 37,590 units in the same month a year ago. LCV wholesales grew by 5.8 percent to 53,141 in February 2019 as against 50,225 units in the same month a year ago.
Tata Motors’ commercial vehicle domestic sales declined by five precent in February 2019 to 39,111 units, compared to 41,222 units sold in the same month last year.
The market continues to exhibit subdued demand sentiments on the back of slowing economic activity, high interest rates, lag effect in implementation of revised axle load norms, slowing industrial output and declining IIP growth index.
The M&HCV truck segment declined by 18 percent to 12,437 units, compared to 15,241 units sold in February 2018, due to low demand as a result of the revised axle load norms.
Maruti’s light commercial vehicle dispatch was at 2,188 units in the month under review witnessing a jump of 74.8 percent. M&M, in the commercial vehicles segment, sold 21,154 vehicles in February 2019, as against 20,946 vehicles in February 2018. In the Medium and Heavy Commercial Vehicles segment, M&M sold 686 vehicles in the month. Exports in February 2019 stood at 3,090 vehicles, a growth of 16 percent.
The three-wheeler wholesales declined by 4.1 percent to 59,875 units in February 2019, as against 62,463 units in the same month a year ago. Passenger carriers dipped by 6.4 percent while goods carrier went up by 6.4 percent.