Honda, Maruti, Tata July Sales Down By 48%; But Govt. Wants To Increase Registration Fees By 20X!

Car sales by down by 48% for July
Car sales by down by 48% for July

Car sales in the country have been catastrophic since quite some time now and it is showing no signs of getting better. This problem has stricken all the hemispheres of automobile industry in the country. The industry is in pits of despair, with the scenario being worst in last 10 years. About half a million vehicles $5 billion passenger vehicles are lying unsold, levying heavy inventory charges and loss to automakers.

To top this off, The Ministry of Road Transport and Highways recently issued a draft notification on July 26, as per which there shall be a 20 times increase in the registration charges of new medium good/passenger vehicles. This will further pressurize the distress in the domestic automobile industry, which is already battling with low sales.

Car Sales Worsens and this Time not Just for Maruti

Maruti Suzuki Sales Fall by 34%

India’s largest car manufacturer, Maruti Suzuki India is showing no growth in car sales. The results of July sales have come in, as analyzed by analysts and it has shown a disappointing result.

  • 1.09 lakh cars were sold in July 2019, 33.5% lesser than the previous year, when 1.64 lakh units were sold. This number is the lowest recorded in last 2 years.
  • Analysts had expected sales of at least 1.17 lakh cars, considering the decline in sales. This number recorded is lower than the expected value.
  • The domestic car rate fell by 35.1% while passenger cars showed a decline of 36.2% in July 2019, as compared to July 2018.
  • Total exports declined as well by 9.4% year-on-year.
  • There was a 27.3% YoY decline in standalone profit to Rs 1,435.5 crore, due to lower sales and higher depreciation expenses.
  • The stock has fallen more than 20% this year and about 40% last year.

The only good news here, however was a 0.5% rise in the sales of light commercial vehicle, under which Maruti Suzuki sells Super Carry.

Tata Motors Slumps

Tata Motors Ltd too hasn’t quite excelled in the sales of its automobile sector.

  • Sold only 32,938 units domestically, marking a 34% drop in demand.
  • Sales of commercial vehicles dropped down by 36%. Medium and heavy commercial vehicle sales dropped by 46%, while light commercial vehicle showed a 21% decline.
  • Sales of domestic cargo and pickup fell by 30%
  • Passenger vehicles showed a decline of 31%
  • Exports fell by 32%

Eicher Motors Sales Fall 22%

The Royal Enfield-maker Eicher Motors Ltd witnessed a decline of 22% in sales in the month of July, selling only 54,185 units.

  • Models with engine capacity up to 350cc declined by 29% to 45,041 units.
  • Models bearing engine capacity above 350cc increased sales by 71%, to 9144 units.
  • Exports showed a tremendous rise by 143% to 5,003 units.

Hero MotoCorp and TVS Motors

  • Hero sold 5,35,810 two-wheelers in July, 21.2% lesser than last year.
  • TVS Motor showed a 13% decline in its sales in July, to 279,465 units.

Government Asks to Increase Vehicle Registration by 20X

Amidst the dark days glooming over the automobile industry in the country, the govt has drafted a proposal to increase the registration charges on new medium good/passenger vehicles by 10 to 20 times.

This means from Rs 1000 to Rs 20,000 on truck or bus, from Rs 50 to Rs 1,000 on two-wheelers and Rs 600 to Rs 5,000 on cars.

Rajan Wadhera, President of the Society of Indian Automobile Manufacturers says that with an unprecedented downturn of already looming sales of automobiles in the country, such an action would fuel the market conditions negatively.

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