Indian car companies continue deep slump.
By R. Chandrasekaran
CHENNAI: Indian car companies continued its struggle in July also to a record fall in car sales, but Maruti Suzuki bucked the trend to post a slender one percent growth, the first month it’s recorded a gain in the current calendar year.
The $100 billion conglomerate Tata Motors seem to be the worst sufferer. The company’s total vehicle sales dropped 29.96 percent to 51,468 vehicles in July from 73,491 units in the last year.
In the domestic circuit, Tata Motors’ passenger vehicle sales plummeted 58.75 percent to 10,824 vehicles from 26,240 units, while the commercial vehicles segment recorded a 14.2 percent fall in sales to 36,367 vehicles from 42,387 units in the previous year July.
On the export front too, the company’s performance was sluggish as orders slipped 12.06 percent to 4,277 units from 4,864 units.
Similarly, Mahindra & Mahindra disclosed 21.17 percent drop in total sales to 37,096 vehicles from 47,059. The domestic sales slipped 19.41 percent to 34,490 vehicles from 42,799 units in the previous year. While passenger vehicles slumped 29.44 percent to 15,530 vehicles from 22,011 units, commercial vehicles sales slackened 6.45 percent to 13,740 units from 14,688 vehicles. Its three-wheeler sales also fell 12.79 percent.
Exports orders plummeted 38.82 percent to 2,606 vehicles from 4,260 units in the previous year.
However, India’s biggest passenger car manufacturer, Maruti Suzuki managed to gain 1.3 percent sales in July to 83,299 vehicles, driven by mini cars and DZire. The company did well in the domestic front with a sales increase of 6 percent to 75,145 units helped by mini cars sales growth of 16 percent and van sales of 10 percent upside. But its utility vehicles recorded a steep fall of 38 percent to 4,562 vehicles whereas compact car sales slipped 12 percent to 13,882 units.
The company’s export orders dipped 27 percent to 8,154 vehicles indicating the overall weakness in the global auto market. This is particularly a bad situation for India considering that it is encouraging exports to sort out its current account deficit and limit the volatility in the Indian currency.
Given the economic slow-down in India, the drop in auto sales was expected. Mahindra & Mahindra’s chief executive for automotive division Pravin Shah has aptly put it, “Over the last few months, the auto industry has been going through one of its worst phases of the last decade with planned shutdowns being taken by companies to correct demand-supply mismatch. The industry is in desperate need for an immediate stimulus from the government.”
To contact contact the author, email to rchandrasekaran@americanbazaaronline.com