Hero MotoCorp, Tata Motors, Royal Enfield posts sharp falls in August auto sales

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Royal Enfield August Sales

Hero MotoCorp, Tata Motors and Royal Enfield have reported sharp declines for their August 2019 auto sales.

While Hero MotoCorp, the world’s largest motorcycle manufacturer by volumes, reported a 21% fall in August sales to 5.43 lakhs, Royal Enfield reported a 24% decline and Tata Motors reported a 48% fall.

Hero MotoCorp’s numbers indicated an increase of 1.5% compared to its July sales.

For the domestic market, Tata Motors posted a decline of 49% on year to 29,140 units, which was also a decline of almost 12% compared to its July performance in the Indian market.

Similarly, Royal Enfield’s sales of 52,904 units in August was a 2% decline on top of the 54,185 units sold in July.

The fall was more visible in the passenger vehicle market, indicating that the slowdown is a reflection of poor consumer confidence and fears of an upcoming recession among ordinary buyers.

Tata Motors’ auto sales for August 2019 for passenger vehicles was down a whopping 58% at just 7,316 units, compared to 17,351 units last year.

Tata Motors’ domestic auto sales in August 2019 was also down 30% over its July number, indicating a deepening of the pain in the four-wheeler market.

Consumers have been putting off big-ticket discretionary purchases in the last six months due to uncertainty about their future income.

Many industries in India are seeing lay-offs as the country comes to terms with a global down cycle in economic activity, originating in the US market.

On the other hand, Tata Motors’ commercial vehicle sales held up better with a 45% decline to 21,824 units in August. However, here too, a decline was visible when compared to the July number, which was 22,453 units.

Earlier, Maruti Suzuki — the country’s largest carmaker — also reported a sharp decline.

Maruti Suzuki August auto sales

Maruti Suzuki’s India sales for August fell 36% to 94,728 units. In July too, the company had seen a fall of 36.3% in its India sales to 98,210 units.

Maruti Suzuki’s exports fell 10.8% in August to 9,352 units, in line with what was seen in July. Overall sales for August was at 106,413, down 32.7% compared to last year. In July, it was 109,264, down around 33.5%.

The only segement to show an improvement was the UV division, which reported a 3.1% improvement in sales in August compared to last year. The segment saw sales improve to 18,522 from 17,971 in August last year and 15,178 in July this year.

COMMENTARY

Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors Ltd said: “Under the challenging market situation, we continued to focus on improving retail sales. Our retail sales were 42% more than offtake and as a result the network stock came down by over 3000 vehicles. This prepares dealers well for the festival season. Our prime focus remains on the working capital rotation of the channel.

“Our aim is to improve the retail capability, till August 2019, 72 new sales outlets were added and 3500+ sales executives were recruited. Marking the onset of the festive season, we will drive positive sentiments with special offers and several special editions.

“We are hopeful that the recently announced financial package by finance minister will help in improving the liquidity of market and to reduce the ownership cost. This will certainly help the industry to revive and drive the growth.”

Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors Ltd said: “Subdued demand sentiment due to poor freight availability, lower freight rates and general slowdown in economy continued to hamper the commercial vehicle demand. System stock reduction through retail focus and aligning production, will continue to be our approach, while cautiously monitoring the market, in these challenging times. As a result, retail sales are estimated to be ahead of wholesale by over 25% in August. We are looking forward to a positive impact of the recently announced stimulus package by the Government.”

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