Automobile Sales Volumes Yet To Pick Up Pace

Automobile companies have reported a slowdown in sales volume in the month of March this year as compared to the corresponding period last year. As the finance minister has reduced excise duty on vehicles, decline in sales of automobiles came in as a surprise to all. Looking at the numbers, it is quite evident that, except the two-wheeler segment, no other segment has reported good sales volume.

Two and three-wheeler maker TVS Motor has seen maximum sales growth of more than 17% in March 2014 by selling 1,96,826 units. While the two-wheeler major Hero Moto Corp’s sales grew by 2.8% at 62,45,895 units in March 2014 as against 60,75,583 units in March 2013.

Tata Motors have reported reduction in total sales by selling just 51184 units, down 29.61%. The commercial vehicle (CV) segment has plunged by more than 77%, while the passenger vehicle segment has surged by more than 2.37%. The surge in passenger vehicle segment is on account of increase in sales of cars like Nano/Indica/Indigo by 10% as they sold  9761 units during the month of March 2014.

Passenger car major Maruti Suzuki’s total sales declined by 5.5 % in March 2014 at 113350 units as compared to 119937 units during the corresponding period last year.

Mahindra & Mahindra's (M&M) total sales has also reduced but it reduced merely by 0.5% at 51636 units in March 2014 as against 51904 units in March 2013. On the other hand, the tractor segment has seen sales growth of around 2% in March 2014.

On cumulative basis i.e from April 1, 2013 to March 31, 2014, the two-wheeler segment of the companies have seen maximum sales growth. While the total sales of Maruti Suzuki has reduced by more than 1.4% on yearly basis, the total sales of Hero MotoCorp till March of this year stood at 5,24,028 units registering a growth of around 12% on yearly basis.  Tata Motors sold 5,66,695 units reporting a total loss of 30 % on yearly basis.

Total sales of M&M has reduced by around 10% on yearly basis till the month of March 2014, selling 507176 units as against 563373 units during the same month of previous year. The sales in tractor segment has been reported at 2,67,634 units,  showing an increase of 19.54% on yearly basis till March 2014.

Commenting on the performance of the company, Pravin Shah, Chief Executive Officer, Automotive Division, Mahindra & Mahindra said, “Post the reduction in excise duty across all segments, the auto industry has seen the level of inquiry going up, but not witnessed any major surge in sales.”

The government has cut the excise duty in order to revive the sales in auto sector, but it has not made any major impact on sales volumes. Sluggish economy, high interest rates and rising fuel prices can be some of the reasons for the decline in automobile sales.