BackAuto sales likely to improve in festive season: Report
In the Passenger Vehicle segment, market leader Maruti Suzuki India took a production cut of about 21%Domestic automobile industry's sales continued their downward trend in September with a 22% year-on-year decline
PremiumMumbai (Maharashtra): Automobile retail sales are likely to pick up with an improvement in consumer sentiment during the ongoing festive season due to recent liquidity easing measures announced by the government and on back of favourable monsoons, according to India Ratings and Research (Ind-Ra).
Consequently, inventory build-up at the dealer level in anticipation of increased demand during this period is likely to lead to increased wholesale billing by original equipment manufacturers (OEMs) during October, it said.
"However, with existing high dealer inventory levels, production cuts by OEMs are likely to continue in the near-term," said Ind-Ra in the credit news digest on India's auto sector.
The report highlights trends in sub-segments of auto sector including passenger vehicles (PVs), commercial vehicles (CVs) and two-wheelers (2Ws) with a focus on sales volumes growth, market share movement, change in commodity prices and recent rating actions.
Domestic automobile industry's sales continued their downward trend in September with a 22% year-on-year decline on weak consumer sentiments owing to the slowing economy. Inventory at dealer level remained high, leading to most OEMs continuing to implement production cuts.
Over April to September, overall auto industry undertook a production cut of 13% year-on-year with 16%, 27% and 13% production cuts in PV, CV and 2W segments respectively.
In the PV segment, market leader Maruti Suzuki India took a production cut of about 21%. The average inventory for PVs increased marginally in September to 30 to 35 days from 25 to 30 days in August.
The average inventory for CVs decreased marginally in September to 50 to 55 days from 55 to 60 days in August. But the average inventory for 2W remained high at 60 to 65 days.
PV sales volume declined 24% on account of a 33% drop in the sales volume of cars. Cars sales volume continue to decline on weak consumer sentiments amid a slowdown in urban and rural household consumption, a rise in the cost of ownership and the growing preference of shared mobility over buying a car.
CV sales volume declined 39% in September owing to decreased industry demand on account of tight liquidity conditions amid slowed economic activity. 2W sales fell 22 per cent on weak rural and semi-urban demand.
In the PV segment, Maruti's market share dropped by around 3% to 49% in September on lower sales volumes, while Hyundai Motor India gained 2% market share. Tata Motors Ltd's CV market share dropped by around 5 per cent to 41% while Mahindra & Mahindra Ltd gained 8% market share.
2W market leader Hero MotoCorp Ltd's market share increased by around 1% to 36% in September, said Ind-Ra in the news digest.
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This story has been published from a wire agency feed without modifications to the text.
