Automobile sector continues to recover in November : IndRa

0 7,339

Biznextindia : India’s domestic Auto is on a recovery path due to improved consumer sentiment backed by heavy discounts and offers by the manufacturers. While Passenger Vehicles sales has continued to improve, Commercial vehicles segment is yet to come out of the woods, analyses India Ratings and Research (Ind-Ra).

In its November edition of Auto sector, Ind-Ra has said that domestic retail automobile sales volumes continued to recover in November 2019, albeit recording lower growth than in October 2019. The retail sales recovery is due to improved consumer sentiments, backed by heavy discounts and offers, with overall industry volumes up 2% yoy in November 2019. Passenger vehicles (PVs) and 2-Wheeler retail sales grew 1% and 3%, respectively, while retail commercial vehicles (CVs) sales volume declined 8% yoy. At the original equipment manufacturers (OEM) level, sales volume fell 12% yoy in November 2019, due to lower wholesale billing by OEMs to reduce inventory at the dealership level despite a sustained retail demand. Existing inventory at dealership levels led to most OEMs continuing to implement production cuts in November 2019.

 

Over April-November 2019, the auto industry undertook an overall production cut of 14% yoy; this translates into around 15% yoy, 28% yoy and 13% yoy production cuts in PV, CV and 2W segments, respectively. The continued production cut, coupled with regulated wholesale billing by OEMs, continued to help keep dealership inventory at a lower level in November 2019. The average inventory for PVs remained at 25-30 days in November 2019. The average inventory for CVs decreased in November to 35-40 days from 40-45 days in October 2019. The average inventory for 2W remained at 35-45 days in November 2019.

 

PV sales volume at the OEM level fell 0.8% yoy in November 2019, on account of an 11% yoy decline in the sales volume of cars while utility vehicle sales volume continued the growth momentum with a 33% yoy increase. However, retail sales continued to recover in November 2019 with PV sales volumes rising 1% yoy on improved consumer sentiments amid attractive discounts and offers. CV sales volume at the OEM level declined 15% yoy in November 2019, on a 37% yoy drop in the sales volume of medium and heavy commercial vehicles, due to excessive inventory at the dealer level. Retail CV sales also declined 8% yoy in November 2019, impacted by delayed purchases, resulting from weak customer sentiments amid a demand slowdown. 2W sales volume at OEM level dropped 14% yoy in November 2019 on a 12% yoy and 15% yoy drop in scooters and motorcycles sales volumes, respectively, as inventory control at dealership level continued. Retail 2W sales grew 3% yoy in November 2019.

 

In the PV segment, Maruti Suzuki India Ltd’s market share decreased around 1% yoy to 53% in November 2019. Tata Motors Limited’s CV market share of 44% in November 2019 was at a similar level, while Mahindra & Mahindra Ltd (‘IND AAA’/Stable) gained 1% yoy market share. The 2W market leader Hero MotoCorp Ltd’s market share decreased around 1% yoy to 36% in November 2019.

 

Leave A Reply

Your email address will not be published.