Upcoming BS-VI, production cuts subdue auto sales

New Delhi: The run-up to BS-VI transition along with the general economic slowdown and truncated production led to the decline in sales of automobile majors in February, market watchers said on Monday.

“Significant dip in sales volumes across segments is primarily due to a run-up to BS-VI transition both on account of deferment by the buyers and less production in order to relinquish stock from the OEM side,” said Sridhar V, Partner, Grant Thornton India LLP.

“Also, the coronavirus impact has affected the supply chain, resulting in a cut down in production,” Sridhar added.

According to Suman Chowdhury, President (ratings) at Acute Ratings and Research: “With sales decline of nearly 30 percent for both PV and CV segments, demand outlook for OEMs continues to be negative.

“What is interesting is the green shoot in rural demand as reflected through a smaller decline in two-wheeler sales and a healthy pickup in tractor sales driven by a good rabi crop expectation. Nevertheless, Acute believes that the overall auto sales will continue to be weak and wider improvements across the economy are at least one to two quarters away.”

Automobile major Maruti Suzuki India reported a 1.1 percent year-on-year (YoY) fall in its total sales in February at 1,47,110 units. During the same period last year, the company had sold 1,48,682 units.

Its domestic sales last month declined by 3.6 percent to 1,34,150 units, the company said in a regulatory filing. Exports during the period under review, on the other hand, rose by 7.1 percent to 10,261 units.

“Maruti Suzuki India Limited sold a total of 1,47,110 units in February 2020. This includes 1,34,150 units in the domestic market, 2,699 units of domestic OEM (original equipment manufacturer) sales and 10,261 units of exports,” the company said in its filing on Sunday.

Another automobile major, Tata Motors reported a 34 percent year-on-year (YoY) decline in its February domestic sales at 38,002 units. It had sold 57,221 units in February last year. (IANS)

Also Read: Government mulling premium on petrol, diesel prices on BS-VI switchover

Also Watch: Watch | Cattle smuggler brutally beaten in Nagaon