Weak Four-Wheeler Sales For August

Overall, the August sales for four-wheeler automobile manufacturers have been no different from the earlier months. Though the figures for Mahindra & Mahindra and Tata Motors look relatively better than the rest, the overall slowdown is visible and has been seeing no improvement in the situation. In the month under review, the trends continue to be in line with the earlier months with:

• Higher demand for diesel vehicles.
• Overall sluggishness in passenger vehicle (PV) sales.
• Robust utility vehicle (UV) growth.
• Lower medium and heavy commercial vehicle (M&HCV) sales.
• High demand for light commercial vehicles (LCV).

MSIL’s production blues resulted in an overall YoY decline of 40.78 per cent in MSIL’s sales. Other car makers though saw an increase in sales because of the longer waiting periods seen on key MSIL models. Since MSIL has a roughly 40 per cent market share in passenger vehicles, the decline in growth for MSIL and the compensated increase in other manufacturers’ sales clearly indicates no overall improvement in automobile sales.

Tata Motors, which saw a comeback in sales in July, has maintained this by posting a 12.09 per cent growth in August 2012 as compared to the previous year. This figure was mainly supported by the 32.57 per cent growth in PV sales. As was the case earlier, the M&HCV sales declined due to weakness in industrial output while the LCV sales were consistently robust.

M&M’s UV strength continued its massive growth story and also compensated for the 17.30 per cent decline in tractor sales which have been drastically affected due to weak monsoons, labour shortages and lower industrial output, resulting in an overall growth of 21.63 per cent in August 2012 as compared to the corresponding month in the previous year.

The other PV manufacturers saw mixed results with improvement in the sales of Toyota, Ford and General Motors and worsening YoY sales growth for Hyundai and Honda Siel. With this, companies are placing their hope on the festive season for a pick-up in volumes. With unchanged macroeconomic conditions, a non-festive turnaround doesn't seem likely to be around the corner.