New Delhi: Wholesale despatches of automobiles across segments remained subdued in February as vehicle manufacturers cut production amid a slump in overall economic activity. Auto sales of major manufacturers were almost flat or declined in February while those of commercial vehicles fell because of a lack of credit and new axle norms.

Maruti Suzuki India Ltd, the country’s largest passenger vehicle manufacturer, reported a 0.9% year-on-year growth in sales to 136,912 units. This is the third straight month in which the Maruti Suzuki’s vehicle production growth has stayed flat.

Mumbai-based Tata Motors Ltd also reported a meagre 2% year-on-year increase in sales to 18,110 units, while Honda Cars India Ltd reported a 16% y-o-y growth in dispatches to 13,527 units, but from a very low base. Toyota Kirloskar Motor India Ltd also reported a 0.87% decline in sales to 11,760 units during the month.

Among the top four passenger vehicle manufacturers, only Mahindra and Mahindra Ltd managed to grow vehicle dispatches by double digits as sales grew by 17% to 26,109 units because of the launch of its new compact utility vehicle XUV300.

“The month of February has augured well for Mahindra as we have witnessed a strong double digit growth of 16% in our utility vehicle portfolio, on the back of our newly launched XUV300 model. Further, the overall growth for the month has been around 10%. On a year-to-date basis too, we have shown a strong growth of 12% at an overall level," said Rajan Wadhera, president (automotive business) at Mahindra.

“Passenger vehicle sales remained muted in February 2019. Given high discounts and several new launches in the recent months, there are some signs of recovery at the dealership level. However, full recovery is still some time away. With the country entering an election phase, consumer sentiment will continue to remain cautious in the near term, which will weigh on the passenger vehicle demand," said Ashish Modani, assistant vice president, corporate sector ratings, Icra Ltd.

In the commercial vehicle segment, sales continue to remain muted as financing options remain limited for fleet owners, after the liquidity crisis in non-banking financial companies (NBFCs) and the introduction of new axle norms for heavy and medium trucks.

The biggest commercial vehicle manufacturer in the country, Tata Motors, reported a 5% drop in sales to 39,111 units, while Ashok Leyland Ltd , the second largest manufacturer, saw volumes increase by just 1% to 17,352 units.

The medium and heavy truck sales of Tata Motors decreased significantly by 18% year-on-year to 12,437 units, while for Ashok Leyland it fell by 2% year-on-year to 12,874 units during the month.

“The market continues to exhibit subdued demand on the back of high interest rates, lagged effect of the implementation of revised axle load norms, and slowing economic activity, resulting in a decline of 5% in commercial vehicle sales volume," said Girish Wagh, president, commercial vehicle business unit, Tata Motors Ltd.

“The MHCV (medium and heavy commercial vehicles) segment has declined by 18%. However, our new product introductions with increased axle load norms is gaining traction as customers are seeing the clear advantages of the superior operating economics," he added.

In two-wheelers, premium motorcycle manufacturer, Royal Enfield saw a massive 16% drop in domestic sales to 60,066 units.

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