Mumbai, September 10, 2019: The slide in the sales of passenger vehicles and two wheelers continued to slide down for the tenth consecutive month. In August 2019, vehicle sales of the automobile sector was down by almost 32 per cent, according to the data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday.
The dispatches in all the segments were down and this was the steepest fall in the vehicles sales since 1997-98, the year since the forum started recording the sales data for the sector. This is 10th month in a row that sales have continued to slide, SIAM said.
The situation in the automobile sector is worsening every passing day and should be the hot topic of discussion in the GST Council meeting scheduled on September 20, said analysts. The sector has been demanding reducing the high rate of GST levied on the sector, with passenger vehicles and two wheelers being charged 28 per cent, the highest rate of GST.
According to analysts, the sector has been facing double whammy of low demand and higher rate of taxation. The demand has taken a hit almost a year ago and that is seen from the sales number. With the overall slump in the economy, the higher GST has also played key role in killing the residual demand. It has also created a huge number of job losses in the sector.
The markets were closed for trading on Tuesday on account of Moharrum; hence the stocks from the auto sector were saved from hammering. However, when the market reopens for trading on Wednesday, how it reacts to the SIAM data that needs to be watched, they added.
SIAM said, vehicle sales across categories, including passenger vehicles (PVs) and two-wheelers and commercial vehicles (CVs), stood at 1,821,490 units last month as against 2,382,436 units in August 2018, a fall of 23.55 per cent.
In July, overall auto sales had witnessed its sharpest decline in nearly 19 years, dropping 18.71 per cent to 1,825,148 units last month as against 2,245,223 units in July 2018. Similarly, domestic PV sales saw its worst fall in August, slumping by 31.57 per cent to 196,524 units from 287,198 units a year ago.
Previous worst decline in the segment was registered in July this year when wholesales had fallen 30.98 per cent to 200,790 units. The fall in PV sales in August was also the tenth consecutive month of decline. In fact, all vehicle categories witnessed decline in sales during the month.
In the PV segment, Maruti Suzuki India posted a 36.14 per cent decline in its August sales at 93,173 units. Hyundai Motor India witnessed a 16.58 per cent decrease at 38,205 units, while Mahindra & Mahindra posted a fall of 31.58 per cent at 13,504 units in during the month.
SIAM said passenger car sales in August were also the worst ever. Last month, domestic car sales were down 41.09 per cent at 115,957 units, against 196,847 units in August 2018.
Besides, total two-wheeler sales last month declined by a record 22.24 per cent to 1,514,196 units compared to 1,947,304 units in the year-ago month. Commercial vehicle sales were down 38.71 per cent to 51,897 units in August, compared with 84,668 units in August 2018.
Motorcycle sales last month declined 22.33 per cent to 937,486 units, against 1,207,005 units a year earlier. Scooter sales have declined by 22.19 per cent to 520,898 units, compared with 669,416 units in August last year. In the two-wheeler category, Hero MotoCorp posted a 20.97 per cent drop in sales at 524,003 units, while rival Honda Motorcycle and Scooter India saw sales decline by 26.26 per cent to 425,664 units.
Similarly, Chennai-based TVS Motor Company saw it sales slump by 20.37 per cent at 219,528 units in August.
On the other hand, August retail sales data showed a somewhat better picture in terms of sales, pointing to inventory correction taking place in the industry. According to the retail sales data, total automobile sales declined by 4.15 per cent 1,600,376 units, compared with 1,669,751 units in August 2018. Similarly, PV sales stood at 238,357 units last month, compared with 256,662 units in the same month of last year, a decline of 7.13 per cent.
Besides, total two-wheeler retail sales declined by 3.4 per cent to 1,242,452 units in August as compared with 1,286,176 units in the year-ago period.