Mumbai: Mahindra & Mahindra (M&M) reported a decline of 16% year-on-year (YoY) in its total domestic wholesales to 37,434 units in July, as the economic downturn continues to hurt the auto industry.
The company’s passenger vehicle wholesales fell 15% YoY to 16,831 units during the month, while commercial vehicle sales declined 17% to 15,969 units. The drop in wholesale numbers hint at more production cuts, which automakers have been undertaking to manage unsold inventory.
The company had reported a decline of 2% YoY and 9.4% YoY in passenger vehicles and commercial vehicles, respectively, in the first quarter of the current fiscal, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
For M&M, the bigger decline in CV sales came from subdued sales in the light commercial vehicle (LCV) category, where the Bolero range of light trucks-- under 3.5 ton--dominates. It reported total domestic sales of LCVs, below 3.5 tons, at 14,874 units in July, down 16% YoY.
The fall in demand for LCVs is a clear indication that small and medium enterprises (SMEs) have also been hit.
The medium and heavy commercial vehicle (M&HCV) category, which primarily reflects the economic health of sectors such as transportation and infrastructure, has reported a drop of 52% from 866 units sold in July last year to 417 units last month.
Commenting on company’s monthly sales performance, Veejay Ram Nakra, chief of sales and marketing, automotive division, M&M said “the headwinds faced by the automotive industry continue as a result of subdued consumer sentiment, triggered by various factors. The industry needs stimuli to help revive consumer demand. We hope that the overall buying sentiment will improve in the run-up to the festival season and with the monsoon turning out to be better than initially anticipated."
Meanwhile, M&M’s farm equipment sector reported a decline of 11% YoY in domestic tractor sales to 19,174 units in July. At 818 units, tractor exports fell 26% YoY.
Rajesh Jejurikar, president - farm equipment sector, M&M Ltd, hopes that the spread of monsoon, government initiatives focused on boosting rural incomes and an overall improvement in liquidity would spur tractor demand during second half of the current fiscal.