Indian auto firms continue with subdued sales in November
MUMBAI, Dec 2: Indian automobile companies continued with its declining sales trend in November with three companies on Sunday indicating a drop in its monthly sales volume.
The Mahindra group's auto company reported total sales including domestic and exports of 41,235 vehicles in November compared to 45,101 vehicles in November 2018, down 9 percent. In the preceding month of October, the company had report sales of 51,896 units.
"The month post festive season is historically a lean month for the automotive industry. Consumer demand, especially for passenger vehicles, typically picks up in the year-end that is in December. Therefore, we expect December to pan out better for the automotive industry," said Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, Mahindra and Mahindra Limited.
In the commercial vehicle segment of buses and trucks, VE Commercial Vehicles Limited, a joint-venture of Eicher Motors Limited and Sweden's AB Volvo, reported a 23.9-percent decline during the month under review at 3,594 units over the same month a year ago. In the preceding month of October, the joint-venture company sold 3,755 units.
The above monthly does not come at a surprise as India last week reported its slowest GDP growth at 4.5 percent for the July-September quarter, the lowest in six years.
Domestic stock brokerage house Nirmal Bang had expected sequential decline in auto companies' sales volume in November on account of seasonality (post festive season) and high base (Diwali festival was in November last year).
"Discounts and consumer offer, which drove festival sales in October, have come off a little this month. We expect Passenger Vehicle (PV) demand to remain subdued on account of a high base and lower offers," said Anish Rankawat, a research analyst at Nirmal Bang.
Another Indian manufacturer Maruti Suzuki, which enjoys over 50 percent share in the country's car market, sold a total of 150,630 units during November, down 1.9 percent over the corresponding month last year.
A recent report by credit rating agency Fitch said that Indian auto sector would remain subdued due to sluggish domestic economic growth and high cost of ownership propelled by BS-VI emission norms to be effective from April 1, 2020.