Starting with a slow festive season, domestic passenger vehicle sales ended the year slowly with another slow month. This is the fifth time in the last six months that the industry has seen less than expected sales. The industry reported lower wholesales dispatches as dealers tried to cut the inventory pile-up that followed a lukewarm sales response in the festive season. According to the latest data released by the SIAM on Monday, Passenger Vehicle sales in December stood at 2,38,692 units slightly down from 2,39,723 units sold in December last year.
Concurrently, domestic car sales were also on the decline with 1,55,159 units sold in December compared to 1,58,338 units sold in December 2017. This luke-warm to tepid response was in-line with previous months, where November saw sales decline by 3.43 per cent, marginally peaking in October with a less than expected rise of 1.55 per cent. Similarly, in July, August and September sales for private vehicles fell by around 2.71 per cent, 2.46 per cent and 5.61 per cent, respectively. “As festive season selling did not happen this year (2018) around, stocks at dealer level went up considerably. It required a correction so automakers made adjustments in this regard during December,” Siam President Rajan Wadhera was quoted in saying.
In response, the Industry seems to believe that the worst is set behind them, as normalization comes with inventory levels reducing from 45-50 days worth to 30-35 days worth. Wadhera also pointed out issues like high fuel prices, lack of finance and credit option as a reason for the declining sales in the third quarter of the year. Now as fuel prices coming down, buyer sentiments have now started to turn positive and we expect the fourth quarter to be better in terms of sales.
2020 will also bring BS6, which is expected to propel prices of cars further up. The Industry is counting on strong pre-buying trends over the next year to avoid major price hikes. In 2018, PV sales rose 5.08 per cent to 33,94,756 units, from 32,30,614 units in 2017. During December, market leader Maruti Suzuki India posted a 1.5 per cent increase in PV sales at 1,19,804 units. Rival Hyundai Motor India also reported an increase of 4.82 per cent at 42,093 units sold taking them to second place.
In third place in terms of sales, it was Tata Motors who managed to stake claim despite a sales dip of 4.31 per cent, with 15, 395 cars sold. Closely followed by Mahindra & Mahindra reported a 2.83 per cent decline in its PV sales at 15,091 units in December.
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