Pain continues in Motown as June sales plummet

June has been another washout month for most auto majors, with sales falling further for both carmakers and two-wheeler makers. Without any clarity on when demand is likely to improve, some players like M&M have announced marginal price hikes to combat falling sales, reports CNBC-TV18's Sunanda Jayaseelan.

Maruti, Mahindra and Mahindra, Tata Motors, Hero MotoCorp or TVS, every company in the Indian auto space continues to fishtail as low demand strangles sales. But a silver lining, if you want to call it that, is that for a few like Maruti, the drop has been a lower-than-expected 12.5 percent in June, mainly because of 2 plant shutdowns in the month to realign sales and production. A lower-than-expected dip of 7.8 percent in the domestic markets also helped, as customers continued to pick diesel over petrol vehicles. Also read: Mahindra & Mahindra June sales down 8% at 38,092 units
Tata Motors continues to struggle for traction in the passenger vehicle segment. Its total Sales dropped 18 percent, with commercial vehicle sales down 10 percent.
The SUV portfolio that has kept M&M treading water for the last few months also lost some buoyancy, thanks to stronger competition from new enterants like Ford's Ecosport... and of course, the higher excise duty on SUVs continues to take its toll. M&M felt the heat, with sales taking a 13 percent hit and has responded with a price hike to counter the pressures of rising input costs.
Pravin Shah, CEO-automotive business, M&M, says, "The 0.5-percent hike across products except for the XUV 500 and Rexton is effective from July 1."
The two-wheeler space, which anyway sees poor sales during the monsoons, has seen some relief. TVS saw sales slip a lower-than-expected 4.8 percent and Hero Motocorp sales slipped almost 6 percent.