In a major setback to the Indian automobile industry, passenger vehicle sales declined 20.55% in May, recording the sharpest ever fall in the last 18 years. Major reasons for a slump in the sales are believed to be slow production and weak consumer demand. Before this, the auto industry saw a similar monthly decline of 21.91 per cent in September 2001.
According to a report by the Society of Indian Automobile Manufacturers (Siam), domestically, the sale of passenger vehicles declined by 20.55 per cent in May 2019 over the same period last year. Within the passenger vehicles, the sales for passenger cars, utility vehicle and vans declined by 26.98 per cent, 5.64 per cent and 27.55 per cent, respectively, in May 2019 over the same period last year, the report said.
The industry produced a total 25.5 lakh vehicles including passenger vehicles, commercial vehicles, three wheelers, two-wheelers and quadricycle in May 2019 as against 27.3 lakh in May 2018, registering a fall of 7.97 per cent over the same period last year, said the report.
The overall commercial vehicles segment registered a decline of 10.49 per cent in May 2019 as compared to the same period last year. Medium and heavy commercial vehicles declined by 18.08 per cent and light commercial vehicles declined by 4.84 per cent in May. Besides, three-wheelers' sales declined by 9.44 per cent in May 2019, said the report.
Two-wheelers' sales declined 7.11 per cent in May 2019 over April-May 2018. Within the segment, scooters, motorcycles and mopeds sales saw a fall of 11.52 per cent, 4.14 per cent and 28.09 per cent, respectively, in May 2019 over May 2018. The overall exports also were in negative at 0.49 per cent, the report said, adding that total of 3.96 lakh vehicles were exported in May compared to 3.98 a year before.
Most auto companies had recorded a fall in their profit in Q4 of FY19, and overall production and sale in May. Maruti registered a 4.6 per cent decline in profit for the last quarter of fiscal 2019 despite a 1.4 per cent increase in revenue as high discounts and unfavourable currency movement ate into its margins. Its profits for the full fiscal also declined by 3 per cent on a 5.4 per cent growth in revenues. While the overhang of unsold stocks from 2018 is still being felt at dealerships, limited offtake means it has taken longer for the industry to diffuse the situation, suggest experts.
Edited by Manoj Sharma