Demand Distress Hits Car Sales In June

Demand distress seems to be plaguing car sales for the third consecutive month of the current fiscal. Owing to weak consumer sentiments across all segments in June 2019 both in the urban and rural regions most leading car makers saw dip in year-on-year sales figures. In fact, inventory pile up owing to the dearth in demand has forced OEMs to schedule plant shutdowns and production cuts in May and June.

- Ritwik Sinha

The country’s largest passenger car manufacturer, Maruti Suzuki India (MSI) sold a total of 124,708 units in June 2019. This includes 113,031 units in domestic market, 1,830 units of domestic OEM sales and 9,847 units of exports. In comparison to June 2018, when domestic sales were at 1,35,662 units, the June 2019 sales have declined by 16.7 percent. Exports in comparison have increased by 5.7 percent.

During Q1 of 2019-20 (FY20), the company sold a total of 402,594 units in the April-June quarter of FY 2019-20. This includes 369,985 units in the domestic market, 4,496 units of domestic OEM sales and 28,113 units of exports.

MSI has recorded a concerning negative growth of 17.2 per cent in June 2019 selling 111,014 units of passenger vehicles in the Indian market against 134,036 units which it sold in the same month last year. Overall sales in the April-June period stood at 363,417 units which is a decline of 20.8 per cent when compared to 363,417 units which was sold in the same period last year. The compact car and utility vehicle segment also recorded negative growth leading to doubledigit decline in sales.

This is the 8th consecutive month where MSI has posted sales decline and the 3rd consecutive month when the decline is in double digit. The biggest decline in sales was registered by the mini segment, which includes Alto and old WagonR range. This segment sold 18,733 units in June 2019, as compared to 29,381 units last year same month, recording a de-growth of 36.2 percent.

Compact segment of cars too registered a decline, despite the addition of the new WagonR. This segment includes cars like Swift, Baleno, Celerio, Ignis, Dzire; registered sales of 62,897 units, down by 12.1 percent, against 71,570 units sold in June 2018.