Sales of commercial vehicle stayed subdued in May, an indication of how sluggish the economy is. India’s GDP grew at just 7.1% in 2016-17, with growth in the March quarter particularly slow. With demand weak, fleet owners appear unwilling to expand their fleets ahead of the GST rollout.
Tata Motors, saw its M&HCV’s volumes plummetted 40% year-on-year in May to just 6,522 units. The company is the market leader in the M&HCV space with a lion’s share of almost 50%. While a part of this was due to the base effect, the company said a severe global supply constraint of fuel injection pumps for BS IV engines was the main cause.
On Thursday, Ashok Leyland reported volumes of 6,139 in M&HCV segment, lower by 18%. “The market continues to remain weak and the demand has still not picked up. There are early signs of retails of BS IV vehicles but it has still been slow,” Tata Motors said in a statement.
In the two wheeler space, while Honda Motorcyles, TVS Motors and HeroMotoCorp reported fairly good volume growth for May, Bajaj Auto, said on Friday, domestic volumes fell 13% to 156,523 in May. Meanwhile, Tata Motors recorded a growth of 27% year-on-year in the passenger vehicle wholesale volumes to 10,855 units. This was mainly driven by continued strong demand for its new launches, namely Tigor and Hexa. The market leader in the passenger vehicle space, Maruti Suzuki posted a 15% rise in volumes. Though, Hyundai had a poor month, as its volumes grew by a mere 1.6% to 42,007 units in May.
Watch this also:
The heightened competition in the utility vehicle(UV) space saw Mahindra and Mahindra’s volumes stay muted, up just 3% y-o-y to 20,290 units. The company lost around R171 crores owing to the ban on BS III vehicles. “The company still has 13,000 units lying in it’s inventory, most of which will be exported, while the remaining will be shifted to comply with the BS IV norms,” said Pawan Goenka, managing director of the company.
In May, Hero reported an 8.7% rise in volumes. The Hero management expects sales momentum to remain strong going ahead.