India's passenger vehicle industry suffered its worst sales performance in almost 19 years in July, with slower economy, higher ownership prices and flooding in some states preventing buyers.
Figures released by the Society of Indian Indian Tomomobile Manufacturers (SIAM) on Tuesday showed that sales dropped 31% to 200,790 vehicles last month, compared to 290,931 units last year. That was the worst sales performance since a 35% decline in December 2000.
This was the ninth straight drop in monthly passenger vehicle sales. Sales declined for the 12 months to 13 months after July 2018, underlining a sharp decline in demand in the world's fourth-largest automobile market.
In July, passenger car sales fell 36% to 1, units66 units, while utility vehicles dropped 6% to 67,707 units. The van dropped 46% to 10,804 units. Industry organization Siam does not sell retail, but om tommobiles, flowers or factory dispatches.
Sales of utility vehicles have declined despite models like Mahindra and Mahindra Limited's XUV300, Hyundai Motor India Limited's location and MG Motor India Limited's hectare models being released recently. The new market has seen strong demand despite overall market weakness.
Maruti Suzuki India Limited sells its Vitara Brezza Compact Sport Utility Vehicle fully, due to weak demand, emerging competition and the launch of its diesel vehicles from April to next.
Sales of Hyundai and Mahindra and Mahindra declined 10% and 15% respectively in July.
With weak domestic economic activity and rising global trade tensions, the Reserve Bank of India cut India's growth estimate for India from 9-20% last week by 9%, predicting its June month forecast%. The shadow banking crisis has created a liquid shortage since the end of 2018, which has compounded the difficulties of the auto industry. Before the onset of Onam and Ganesh Chaturthi, heavy floods in major states like Maharashtra, Kerala and Karnataka are also affecting the fate of the automobile industry.
In commercial vehicles, the economic downturn is associated with an increase in the freight carrying capacity of the trucks, leading to a sharp decline in sales as fleet owners can carry more freight on their existing trucks. Weak market was also contributing to lower demand for agriculture and other sectors as fleet owners cut rents.
Sales of medium and heavy commercial vehicles declined 37% to 17,722 units in July, while light commercial vehicles dropped 19% to 39,144 units. Commercial vehicle sales dropped 26% to 56,866 units.
The sharp contraction in consumption in urban and rural markets and the increase in third-party insurance premiums adversely affect the sale of motorcycles and scooters. Total shipments in the two-wheeler segment dropped 17% in July to 1.51 million units. Sales of motorcycles dropped 19% to 933,996 units, while scooter sales dropped 12% to 526,504 units.
As the recession intensified, automakers announced the closure of their factories to accommodate inventory. India's largest commercial vehicle maker Tata Motors Ltd has closed its Jamshedpur and Poona plants for 12 days. Ashok Leyland Limited, the third largest commercial vehicle manufacturer by volume, closed its Pantnagar facility nine days last month due to weak demand.
Among car makers, Maruti cut production for the sixth straight month in July to control dealership stocks.
"There is no point in pushing shares in a dealership when there is no demand in the market. After taking a look at the market situation, we will take a product call. Maluti Suzuki Senior Executive Director (Sales and Marketing) RS "With the pressure on retail sales, we have a little over a month's inventory with our dealers," Kalsi said in a recent conference call with analysts.
Car and two-wheeler makers begin increasing the dealer's inventory from August through the end of the festive season, beginning with Onam in August and ending with Diwali in November.
Siam Director General Vishnu Mathur said the arrest could be made only if the tomobile industry receives a financial package from the government. He said that flood situation in states like Maharashtra would have a greater impact on consumer sentiment, he said.
“Thanks, this time the festive season will be a little late. Therefore, if there is any assistance from the government, we can expect demand to rise during the festive season, "Mathur said. The wider economy. Demand in the rural market has also dropped significantly and the double-digit decline in motorcycle sales is an indication of the demand situation in rural areas."