Tata Motors surprises Maruti Suzuki, Hyundai

Domestic passenger vehicle sales fell for a second consecutive month in August due to a high base effect from goods and services tax (GST) implementation last year and partial impact of floods in Kerala.

Data released by Society of Indian Automobile Manufacturers (SIAM) on Tuesday showed that domestic passenger vehicle (PV) sales stood at 2,87,186 units in the last month, down 2.46% from 2,94,416 units in August 2017.

Car sales fell 1.03% to 1,96,847 units from 1,98,892 units in the year-ago period.

“There is an impact of high base effect, as sales last year from July to September were high after GST implementation,” SIAM director general Vishnu Mathur said. Besides, there is also some impact of floods, especially in Kerala which is a big automotive market, he added.

In July this year, passenger vehicle sales had dropped 2.71% to 2,90,960 units, the first fall in nine months, owing to a high base last year when sales surged due to GST rollout. Car sales had also slipped to 1,91,979 units as compared to 1,92,845 in the year-ago month.

Though vehicle sales across categories rose 3.43% in August at 23,81,931 units from 23,02,902 units a year ago, the pace of growth slowed down from the previous month when the sales had increased 7.97% to 22,44,875 units.

Market leader Maruti Suzuki India’s (MSI) PV sales fell for second month in a row. The company sold 1,45,895 units in August, a 3.55% drop from a year ago. In July, MSI had posted a marginal fall at 1,52,427 units.

Rival Hyundai Motor India also saw a 2.76% drop in August at 45,801 units. It had posted a 1.1% growth in July at 43,481 units.

Tata Motors, however, posted a 24.98% jump in its PV sales in August at 20,323 units.

Total two-wheeler sales rose 2.91% to 19,46,811 units. Motorcycle sales grew 6.18% to 12,06,512 units in August but scooter sales fell to 6,69,416 units as against 6,73,444 units a year ago.

“Two-wheeler sales were partially affected by the restriction imposed in West Bengal on new purchases without driving licence,” Mathur said.

In motorcycles, market leader Hero MotoCorp registered a growth of 1.29% 5,91,401 units. Rival Bajaj Auto saw its sales jump 27.25% to 2,18,437 units. Honda Motorcycle and Scooter India (HMSI) posted a 4.9% increase.

In scooters, leader HMSI saw sales fall 4.66% to 3,75,901 units. TVS Motor Co, however, posted a 9.8% rise. Hero MotoCorp’s scooter sales were down 7.73%.

Despite revision in axle load norms, commercial vehicles (CVs) continued their strong show with sales jumping 29.56% to 84,668 units in August. In July, CV sales had grown 29.65% to 76,497 units. “Considering how this segment has grown above expectations, we are looking at having a re-look at our forecast for an upward revision,” Sen said. SIAM had projected the CV segment could grow 10-12% this fiscal. However, in the April-August period, the segment grew 41.67%.

“The impact of change in axle load norms has not been felt so far primarily because of a) healthy underlying demand, especially from construction sector and b) delays in implementation of axle load norms,” said Shamsher Dewan, vice president & sector head - corporate ratings, Icra, in a note.

Auto stocks fell up to 4.2% on Tuesday. Shares of Apollo Tyres tumbled 4.17%, Hero MotoCorp 3.06%, Tata Motors 3.03%, TVS Motor 2.64%, MSI 1.56%. BSE auto index fell 1.52% to end at 23,903.70.

Source: DNA Money