The fall comes despite the high discounts offered by dealers and manufacturers.
Increased prices and negative sentiments kept buyers away from showrooms in July, which continued the slump in sales of cars and SUVs through its ninth consecutive month.
Hikes on insurance premiums, and an increase in the cess on fuel also played their part to dampen demand for the month. The fall comes despite high discounts offered by the dealers and the manufacturers.
Maruti Suzuki, India’s largest car maker, saw sales of own-branded vehicles slump more than 36 percent in July. The Delhi-based maker of the Swift and Baleno closed the month with domestic passenger vehicle (PV) sales of just 96,478 units, making it a multi-year low.
Every vehicle segment of the company, with the exception of the sedans (Ciaz), posted a fall in July. The segment which comprises of the Wagon R, Baleno, Swift and Dzire, reported a fall of 23 percent while the segment comprising Ertiga and Vitara Brezza fell by 38 percent.
Maruti has been cutting down production consistently during the past several months. However, the slowdown is such that inventory continues to remain high. After the announcement of its June quarter results, a senior Maruti Suzuki official said that the company’s inventory stands at one month.
Despite two new models in its line up, Hyundai, the Korean car maker, reported a decline of 10 percent in sales during July. The company sold 39,010 units during the reporting month as against 43,481 units sold in the same month last year. Hyundai added the Venue and Santro to its portfolio in recent months.
Mumbai-based Mahindra & Mahindra (M&M), the maker of Scorpio and XUV500, reported a decline of 15 percent in domestic volumes of PVs to 16,831 units during July.
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 and conversions.”
Sales of Honda Cars nearly halved to 10,250 units during July, a fall of 49 percent compared to 19,970 units sold in the same month last year. The company clarified that its sales for July 2018 was a high base month as it included sales of then newly launched Amaze sedan.
Rajesh Goel, Senior Vice President and Director, Sales and Marketing, Honda Cars India said, “The degrowth in the automobile industry further intensified last month amidst weak buying sentiment and overall slowdown. We are also witnessing lot of postponement of purchases. It is extremely worrisome since the decline in July 19 is much severe than the decline seen in Q1, that too when the industry had de-grown in July last year as well.”Among two wheelers, Bajaj Auto, the country’s third largest two-wheeler maker, posted a 15 percent decline in volumes to 201,433 units during July in the domestic market. Rival TVS Motor Company sold 208,489 two-wheelers in July, which is a fall of 16 percent.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.