Passenger Vehicle Segment Records Lowest Sales In Last Eight Years; Decline Of 17.07 Per Cent In Apr

Carmakers have started the new financial year with a decline in sales numbers. Such a huge drop in monthly sales numbers has been witnessed after Eight years, after October 2011 when the segment recorded a negative growth of 19.87 per cent. Selling 247,541 units in April 2019, the segment has witnessed a significant slump of 17.07 per cent compared to the same month last year when 298,504 units were sold. Passenger cars took a massive hit recording a negative growth of 19.93 per cent at 160,279 units against 200,183 units which were sold in April 2018. Even the growth of SUVs has stopped with the segment witnessing a decline of 6.67 per cent. 73,864 units of utility vehicles were sold last month against 79,136 units which were sold in the corresponding month last year. Vans have recorded a whopping decline of 30.11 per cent selling 13,408 units compared to 19,185 units which it sold a year ago.

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Negative sales growth was anticipated from the start of the month when majority of major carmakers, including Maruti Suzuki and Hyundai which together command about 68 per cent of the market share, reported a double-digit decline in sales. According to SIAM, liquidity crunch coupled with other headwinds in the economy like one-time insurance premium and rising commodity prices have impacted customer sentiments drastically which is likely to perk up over time. Commenting on the sales growth, Vishnu Mathur, Director General, SIAM said, "The sentiment in the market is not very good. If you look at all other discretionary purchases, the FMCG sector is also seeing this. Travel and Tourism sector is also seeing this, all discretionary spending are held back by the consumer. And vehicles are definitely a discretionary purchase."

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The numbers are expected to remain low for the next couple of months due to inventory build-up as carmakers are pacing up the production gradually in a bid to avoid stocking at the dealer level. The impact on retail sales has not reflected largely yet and it has recorded a marginal de-growth of 1.28 per cent retailing 264,035 units against 26,470 units which were sold in April last year. That said, without projecting any outlook in terms of figures, Mathur has said that the segment will grow once the disrupting factors are absorbed and that expected after a stable government is formed after general elections. Moreover, pre-buying is also expected to happen on the onset of BS6 which could give fillip to the overall volumes.