Tata Motors domestic sales tank 14% at 49,073 units in June

Home-grown auto major Tata Motors on Monday posted 14 per cent decline in domestic sales at 49,073 units in June 2019. 

The company dispatched 56,773 units in June 2018, as per Tata Motors release. 

Sales of passenger vehicles in the domestic market dropped by 27 per cent at 13,351 units, as compared to 18,213 units in June 2018, due to low customer sentiments due to liquidity crunch. The company mentioned that the industry continued to remain stressed; however, the market is expected to bounce back.

Sibendra Barman – Vice President, Sales Marketing and Customer Support, Passenger Vehicle Business Unit (PVBU), Tata Motors Ltd. said, "Auto Industry has been de-growing for the past 4 quarters. Customer sentiments remained low due to the overall slowdown in economic growth.

He also added, "Consumer expectations on revised GST rate on cars and limited liquidity availability kept them from firming their buying decision this month. We expect to see a growth in demand in the coming few months and are well equipped to deliver the best to all."

Sales of commercial vehicles in the domestic market saw a drop of 7 per cent at 35,722 units last month as against 38,560 units in June 2018. The market continues to exhibit subdued demand sentiment as customers are postponing purchases given the poor freight availability, the falling freight rates affecting their viability, the statement said.

The company highlighted that the slowing down of the economy is hurting overall customer sentiments and causing an impact on demand for fresh vehicles.

The M&HCV truck segment recorded sales at 9,358 units, declined by 19 per cent over June 2018, due to lingering impact of higher axle load regulation imposed last year.

As per Tata Motors, fleet operators are facing viability challenges due to low freight availability and falling freight rates. Tipper sales have also gone down by 12 per cent Y-O-Y basis, as there is slowdown in the execution of existing infrastructure projects, delayed payments to contractors and lack of new projects.

The I&LCV truck segment sales however witnessed a growth of 3 per cent at 4,564 units last month. This segment has not been affected by the revised axle load norms and the demand has been led by the growth in e-commerce and intra-city logistics.

The new products introduced in the fast growing 15-16 ton segment and CNG products have been well accepted by the customers, the company underlined. 

The SCV and pickup segment sold 15,094 units in June 2019, a decline of 10 per cent, compared to June 2018. This segment is heavily dependent on the ‘First Time User’ category of customers and thus has been impacted due to the liquidity crunch, higher interest rates and difficulty in funding from the NBFCs. The progress of monsoon will be a key factor for the revival of demand in this segment over the next quarter.

The commercial passenger carrier segment sales was at 6,706 units, experiencing an upsurge of 17 per cent, over June 2018.

Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors Ltd. said, “Tata Motors’ Commercial Vehicles (CV) domestic sales in June 2019 at 35,722 units registered a drop of 7 per cent compared to 38,560 units sold last June. Both M&HCV and the SCV segment has been hit by poor consumer sentiment, falling freight rates and difficulty of funding from NBFCs with a respective decline of 19 per cent and 10 per cent.

He also added, "In M&HCVs, the usually afloat tipper segment has also weakened due to slowdown in infrastructure projects. The I&LCV truck segment sales however have grown by 3 per cent with sales of 4,564 units led by growth in e-commerce and intra-city logistics.

Wagh further said, "The commercial passenger carrier segment has also seen an upsurge of 17 per cent over June’18. The school buying season has added momentum to the sales this month along with ambulance and electric bus orders. The progress of monsoon will be a key factor for the revival of demand in certain segments over the next quarter.”

Company's exports (from CV and PV) in June 2019 was at 2,702 units, low by 48 per cent over June 2018, due to drop in retails in Bangladesh, Nepal & Middle East markets.

During Q1 of FY'20, the cumulative sales for the domestic market (April 2019 - June 2019) declined by 20 per cent at 131,879 units as compared to 164,579 units sold over the same period last year. During Q1 FY'20, the company sold 36,945 units, down 30 per cent, compared to 52,937 units, in the same period last year.