Auto Sales dip sharply in December 2019 due to Inventory Management; M&M & Maruti posts positive results

Inventory management in the run-up to BS-VI transition and year-end shutdowns Seasonality has an impact on the sales numbers for December 2019. Almost every carmaker, like Tata Motors, Honda, and Hyundai among others, has posted a sales report for December 2019 and reported a dip in sales at the individual level.

The numbers posted by the auto sector suggests that the slowdown witnessed by the sector for almost a year, except a slight rise in festive season between September and November 2019, has not ended yet.

Tata Motors has reported a fall of 13.8 per cent decline, year-on-year (YoY) in total sales in December. It sold 46,903 units in December 2019 against 54,439 units in December 2018. Its domestic sales went down by 12 per cent to 44,254 units against 50,440 units of the corresponding year. Similarly, domestic sales of passenger vehicle declined by 10 per cent to 12,785 units against 14,260 units of December 2018.

"Retail was higher than off take by -13% in December, with further stock reduction, as we move closer to BSVI transition. Overall sales continued to grow for the second month in a row, with Medium and Heavy Commercial vehicle sale being higher than November'19 by 15% after posting a - 23% growth last month, said. Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors Ltd.

Mahindra & Mahindra (M&M) Ltd reported a 1 per cent rise in automobile sales in December 2019. Rise in passenger and utility segment offset the dip in the commercial vehicles segment. It saw a growth of 4 per cent in passenger vehicles segment as it sold 15,691 units in December 2019 against 15,091 units in December 2018. In commercial vehicles segment sold 16,018 units against 16,906 units of December 2018.

"Our performance in December is as per year-end sales outlook and currently we are also comfortable with our overall stock levels. As we get into the New Year, we are fully equipped to roll out our BSVI products and have taken all requisite measures for a smooth transition over the next three months", says Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, M&M Ltd.

Maruti Suzuki, the country's leading carmaker, has reported a 2.4 per cent YoY rise in car sales in the domestic market in December 2019. It has sold 124,375 units in the domestic market in December as compared to 121,479 units sold in the same month a year back.

Honda Cars India Ltd also saw 36 per cent slump in domestic sales as the company sold 8,412 units in December 2019 against 13,139 units of December 2018.

Hyundai Motor India Ltd total sales declined by 9.9 per cent as it sold 50,135 units in December 2019 against 55,638 units of December 2018. Its domestic sales stood at 37,953 units against 42,093 units of December 2018.