Auto Sales: PV wholesales down by 17 per cent

The overall passenger vehicle (PV) sales stood at Rs. 2,45, 599 units in April 2019 as against 2,96,369 units in April 2018. Society of Indian Automobile Manufacturers (SIAM) has projected that auto sales will register single-digit growth in FY20.

The fall in demand was on account of tepid consumer sentiment and increased political uncertainty in the country. The weak demand was compounded by impending agri-distress on account of below normal monsoon expectations. Rising commodity prices, tightening NBFC lines and the stocking and destocking vehicles by car manufacturers to adjust to new safety and upcoming emission norms have slowed dispatches from factories.

In the month of February 2018, there were several new launches due to which car sales soared in April 2018, therefore, a high base effect combined with the consumer shift to shared mobility dragged the YoY sales numbers.

Of the 12 major car manufacturers in India, 11 registered a de-growth in sales volumes. The sharp de-growth in the passenger vehicle segment was largely due to Maruti Suzuki which enjoys almost 50 per cent market share in the industry. The market leader reported a decline of 19.61 per cent in sales volumes in April 2019. Honda Cars India was the sole carmaker to registered strong growth in sales volumes, up by 23.29 per cent.

For car manufacturers, the race to gain market share is set to intensify as new players enter the passenger vehicle arena. The shift to cleaner BS-VI norms from April 2020 will make passenger vehicles more expensive. SIAM maintains a cautious growth outlook for FY20 and estimates passenger vehicle sales to grow by only 3 to 5 per cent in the next fiscal.

On Thursday, Maruti Suzuki, M&M and Tata Motors were trading at Rs. 6647.10, Rs. 649.15 and Rs. 211.40 per share on the BSE.