High fuel, interest costs subdue August auto sales

High fuel, interest costs subdue August auto sales

New Delhi: Unfavourable base effect, along with high fuel and interest costs, subdued the monthly sales of select Indian automobile companies in August.

Analysts said that natural calamities in some parts of the country due to heavy monsoon rains also dampened buyers’ sentiments.

On Saturday, automobile major Maruti Suzuki India reported a 3.4 per cent dip in its overall sales in August to 158,189 units compared to 163,701 units sold in the year-ago month.

“Sales during the month were adversely affected due to severe floods in Kerala and heavy rains in other parts of the country,” the company said.

In the domestic market, it sold 147,700 units during August, down 2.8 per cent from 152,000 units sold in the corresponding month in 2017.

Similarly, the Hyundai Motor India’s domestic sales were also hit. The company reported a decline of 2.8 per cent in its domestic sales to 45,801 units from 47,103 units sold in August 2017.

However, the company’s overall sales including exports rose by 3.4 per cent to 61,912 units from 59,905 units off-take during the corresponding month of last year.

Commenting on the August sales, Vikas Jain, National Sales Head – Hyundai Motor India, said the company registered a strong growth of 25.8 per cent in export markets.

On the other hand, commercial and passenger vehicles maker Tata Motors’ domestic sales grew by 27 per cent last month over corresponding period of 2017.

The company sold a total of 58,262 units in the domestic market last month, up from 45,906 units sold in August 2017. Its sales from exports (commercial and passenger vehicles) in August 2018 increased to 5,478 units from 3,082 units shipped abroad last year.

Another automobile major Mahindra & Mahindra (M&M) reported a 14 per cent rise in its overall sales, including exports, in August 2018.

As per the company data, the overall sales during the month under review grew to 48,324 vehicles from 42,207 vehicles sold in August 2017.

Other companies such as commercial vehicles maker Ashok Leyland and car maker Ford India logged sales growth last month.

Company-wise, Ashok Leyland sold 17,386 units last month as against 13,637 units logged in August 2017.

Ford India’s total sales last month stood at 20,648 units as compared to 15,470 units sold in August 2017.

Honda Cars India sold 17,621 units last month, up from 17,361 units sold in August 2017.

Additionally, two- and three-wheeler major TVS Motor Company sold a total of 343,217 units last month up from 317,563 units sold in August 2017.

Two-wheeler manufacturer Suzuki Motorcycle India’s domestic sales rose by 31 per cent to 62,446 units over August 2017.

“The auto sales data released by select OEMs for August 2018 paints a mixed picture,” said Shamsher Dewan, Vice President and Sector Head – Corporate Ratings, ICRA.

“While commercial vehicle segment has continued to maintain its growth momentum, the sales data in the Passenger Vehicle segment indicates some softness, possibly emanating from adverse impact of heavy rains in many parts of the country and floods in Kerala.”

According to Sridhar V., Partner, Grant Thornton India: “Industry is keenly waiting for a positive uptick post monsoon and during the festive season which is not too far away.”

“Two-wheelers are back in action in August 2018 and commercial vehicles sales continue to be on a roll.”