BackAuto sales skid in April amid election worries
PV, two-wheeler sales dropped 16% and 17%, respectively, from a year agoMaruti Suzuki reported a year-on-year decline of 19.4% in passenger vehicle sales at 131,749 units
PremiumApril has turned out to be a month of distress for passenger vehicle (PV) and two-wheeler makers because of cautious buyer sentiments during the ongoing general elections. Data compiled by Mint shows that PV and two-wheeler sales declined by about 16% and 17%, respectively, from the year-ago period.
India’s largest carmaker, Maruti Suzuki India Ltd, on Wednesday, reported a year-on-year decline of 19.4% in PV sales at 131,749 units, including 364 units sold to other original equipment manufacturers, but excluding the light commercial vehicle sales of 2,319 units.
Across the different PV categories, Maruti Suzuki reported sales of 22,766 units in the mini segment, down 40% compared to 37,794 units in April 2018. Similarly, in the compact segment, sales stood at 72,146 units in April, down 14% from 83,834 units in the year-ago period. It sells Alto and the old WagonR model under its mini segment; and Swift, Baleno, Celerio, the new WagonR, Ignis and Dzire are part of its compact portfolio.
In the mid-size category, where Maruti Suzuki sells the Ciaz sedan, it reported a decline of 45.5% from the year earlier to 2,789 units in April. It had sold 5,116 units of the Ciaz in April 2018.
The company’s utility vehicle (UV) category, which has bucked the downward trend, reported sales of 22,035 units, up 6% against the 20,804 units sold in April last year.
Maruti Suzuki’s UV portfolio includes the Vitara Brezza, Ertiga and S-Cross. The vans category reported a drop of 26.7%, selling 11,649 units last month, against the 15,886 units in April 2018.
Auto analyst Aditya Jhawar from Investec Capital Services (India) Pvt. Ltd, cited three key reasons behind Maruti Suzuki’s downward trend: High base effect from Q1FY19, inventory correction and sluggish demand due to factors, such as liquidity crunch and poor sentiments, among others. “For Maruti Suzuki, the rural markets grew by 10% and urban markets declined by 2% in FY19." Jhawar added that the Indian market may see an increase in demand for PVs after the elections.
Hyundai Motor India Ltd, India’s second-largest carmaker, reported sales of 42,005 units in April, a decline of 10% from the year earlier. The company is expected to consolidate its market position with the soon-to-be-launched Venue compact sport utility vehicle.
Mahindra and Mahindra Ltd (M&M) posted domestic PV sales of 19,966 units, down 9% from a year ago. Its UV segment sales stood at 18,848 units, compared to 20,371 units in April 2018, down 7%. In the cars and vans category, M&M reported sales of 1,118 units, as against 1,556 units in April last year, down 28%. The company said domestic sales also included the numbers sold by its subsidiary, Mahindra Electric Mobility Ltd.
“The ongoing elections had subdued purchase sentiment in 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," said Rajan Wadhera, president (automotive sector) at M&M.
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