Vehicle sales plummet for 11th straight month

Despite a number of fresh measures by the government, including a sharp corporate tax cut, domestic vehicle sales plummeted for the 11th straight month in September. Society of Indian Automobile Manufacturers (SIAM) data showed that commercial vehicle sales - a proxy for the

economy’s commercial health - steeply fell by 39% to 58,419 units in September.

Rating agency ICRA had, earlier this month, said its outlook on the domestic commercial vehicle sector was negative, considering the sharp correction in vehicle sales amid slowing economic growth, overcapacity and tight financing environment. Signs that the customers were still staying away from showrooms was clearly visible in passenger vehicle sales data, which witnessed a decline of 23.69% to 223,317 units this September. Passenger cars sales witnessed a de-growth of 33.4% to 131,281 units. In August, sales were down 41%.

SIAM President, Rajan Wadhera, however, said that the festive season retail sales that are monitored on a regular basis is “good” but avoided giving any sales forecast.

“The Navaratri sale has also been good and, if we compare it to the sales from last year, the sale has been nearly 10-12% better,” he said.

Wadera stressed that owing to a number of government steps and ongoing festive season, the consumer sentiments have improved. However, Consumer confidence, the Reserve Bank of India showed, had dipped to six-year low in September.

Besides, two-wheeler sales - often tracked to analyse the health of the rural market - were also down 22.09%.

Three-wheeler sales declined by 6.66% in April-September 2019, over the same period last year. Within three-wheelers, passenger carrier sales registered a degrowth of 6.37% and that of goods carriers declined by 7.98% in April-September 2019 over April-September 2018.

In the two-wheeler segment, sales registered a de-growth of 16.18% in AprilSeptember 2019 over April-September 2018 while in the segment, scooters, motorcycles and mopeds declined by 16.94%, 15.24% and 25.33%, respectively, in AprilSeptember 2019, over the comparable period last year. Overall domestic automobile sales fell 22.41% in September 2019. In August, the sales data had showed that overall sectoral offtake in the domestic market had plunged 23.55%. However, exports across categories inched up by 0.68% to 417,232 units from 414,428 units shipped out during September 2018.

The sales decline has forced several auto makers across the board to announce production cuts and slash their workforce in order to cut losses.