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After festive spike, PV demand slips into negative zone, again

ET Bureau|
Updated: Dec 02, 2019, 11.42 AM IST
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Highlights

  • Except Hyundai's 2% growth in sales, other major players had negative numbers
  • Retail sales had been healthy in October as companies threw in massive discounts to lure buyers, while also liquidating the BSIV stocks to remain clear of the government’s BSVI migration date of April 2020
NEW DELHI| MUMBAI: Demand for passenger vehicles tailed off last month after a festiveseason spike in October, with sluggishness in the broader economy putting the brakes on auto sales. Higher financing costs and the industry’s impending transition to BS VI emission norms will likely keep sales muted in the medium term.

Maruti Suzuki, which sells one of two cars running on Indian roads, saw sales decline over 3%.

Sales of mini cars (Alto, S-Presso, and old WagonR) declined 12% to 26,306 units, while those of compacts (New WagonR, Swift, Dzire, Baleno, Celerio, and Ignis) increased 7.6% to 78,013 units.

Sales of Maruti’s utility vehicles (XL6, Ertiga, Vitara Brezza, and S-Cross) declined 1.3% to 23,204 units.

“October was encouraging in terms of retail sales. With the festive season over, we have to watch very carefully how demand pans out over the next few months,” said Shashank Srivastava, executive director (marketing and sales) at Maruti Suzuki. “There are several negative factors.

Vehicle acquisition prices have increased because of implementation of safety and emission regulations, and financing continues to be an issue. Besides, the industry is readying to transition to BS VI.”

At Mahindra & Mahindra (M&M), sales fell 10% to 14,637 units last month. Veejay Ram Nakra, chief of sales and marketing (automotive division), M&M said: “The month after the festive season is historically a lean month for the automotive industry.

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Consumer demand, especially for PVs, typically picks up in the year-end, or in December. Therefore, we expect December to pan out better for the automotive industry.”

Hyundai bucked the trend to report a growth of 2%, selling 44,600 units in the month under review. The company’s newly launched sports utility vehicle Venue helped boost numbers and is expected to register 100,000 bookings by the end of the year.

Vikas Jain, national sales head at Hyundai, said that market conditions are “challenging”, but said that Grand i10 Nios, Elite i20, Venue and Creta helped boost volumes last month.

New entrant MG Motor India sold 3,239 units of SUV Hector in the month under review; Volkswagen raised volumes 17.4% to sell 2,937 units.

At Tata Motors, passenger vehicle sales dropped 39% to 10,400 units. The company said its retail sales exceeded dealer dispatches by 15%, which helped reduce the network stock by 35% in this fiscal.
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