High prices, liquidity crunch slow passenger vehicle sales growth to 2.7% in FY19https://indianexpress.com/article/business/high-prices-liquidity-crunch-slow-passenger-vehicle-sales-growth-to-2-7-in-fy19-5665908/

High prices, liquidity crunch slow passenger vehicle sales growth to 2.7% in FY19

Despite new launches, sales failed to revv up during H2 of FY19, which had prompted SIAM to lower sales forecast.

 Business news, Automobile sales, Automobile sale growth, passenger vehicles sales, passenger vehicles, new passenger vehicles launch, auto sales, car sales, pre-goods and services tax, car sales decline, indian express
Domestic car sales grew by 2.05 per cent, with 22,18,549 units sold in FY19 compared to 21,74,024 units in FY18.

Sales of passenger vehicles (PVs) in India rose by a mere 2.7 per cent in 2018-19, with weak consumer sentiment along with high prices, liquidity crunch and uncertainty over the upcoming elections put a roadblock on the segment’s sales growth.

Data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday showed that domestic PV sales for FY19 rose to 33,77,436 units, as against 32,88,581 units for 2017-18. However, despite new product launches, sales failed to accelerate in the second half of last fiscal, which had even prompted SIAM to reduce the sales forecast for PVs from its previous estimate of 8-10 per cent to 6 per cent. At 2.7 per cent, the final figure is even lower.

SIAM president Rajan Wadhera told reporters, “If we look at the positive side then we have continued to grow, though not in high single-digit or double-digits, but low single-digit. Also, it is the highest-ever sales and production in a financial year.”

Domestic car sales grew by 2.05 per cent, with 22,18,549 units sold in FY19 compared to 21,74,024 units in FY18.

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Sales of utility vehicles (UV) were at 9,41,461 units last fiscal, as against 9,22,322 units in 2017-18 — a growth of 2.08 per cent.

However, exports of PVs in 2018-19 fell by 9.64 per cent to 6,76,193 units, as against 7,48,366 units in 2017-18.

“In the year gone by, we faced many challenges. The biggest being high commodity prices during the year which prompted companies to hike vehicle prices which impacted demand. Further issues like compulsory insurance, liquidity crunch at funding companies impacted the sales,” the SIAM president said.

Amid challenges including general elections in the first quarter and transition to BS VI-compliant products later in this financial year, the industry body said it expects PV sales to grow between 3-5 per cent this fiscal. “We expect some pre-buying to happen before the transition to BS VI emission norms. Hope it leads to some growth. We firmly believe in India growth story,” Wadhera said.

During FY19, market leader Maruti Suzuki India (MSI) sold 17,29,826 units of PVs, growing by 5.25 per cent. Rival Hyundai Motor India came a distant second selling 5,45,243 units, rising 1.68 per cent.

Mahindra & Mahindra’s PV sales were at 2,45,351 units, growing 2.21 per cent, as per SIAM data. Across categories, sales increased 5.15 per cent to 2,62,67,783 units in FY19 from 2,49,81,312 units in FY18.

In March, PV sales dropped 2.96 per cent, making it the eighth decline in eight months. The sales stood at 2,91,806 units during the month from 3,00,722 units in the year-ago period. —With PTI