New Delhi: Sagging consumer sentiment amid economic slowdown has led major automobile manufacturers to report significant decline in sales during August. Tata Motors reported a 49 per cent slump in its domestic sales on a year-on-year basis at 29,140 units.
The commercial vehicles' sales dipped 45 per cent to 21,824 units, it said. It sold 7,316 passenger vehicles in August, showing a decline of 58 per cent from 17,351 units during the year-ago month. "Subdued demand sentiment due to poor freight availability, lower freight rates and a general slowdown in the economy continued to hamper commercial vehicle demand," said its President of commercial vehicles business division Girish Wagh.
Maruti Suzuki India too reported 32.7 per cent decline in its vehicle sales last month. The company sold 106,413 units including exports compared with 158,189 vehicles in August 2018.
Of the total off-take, domestic sales fell nearly 36 per cent to 94,728 automobiles. Domestic passenger vehicle sales were down 36.1 per cent at 93,173 units from 1,45,895 during the corresponding month last year, the company said in a statement.
Similarly, Mahindra and Mahindra's (M&M) domestic sales declined 26 per cent in August year-on-year. It sold 33,564 vehicles during the month against 45,373 units in the year-ago month.
"The auto industry continued to be subdued in August due to several external factors," Veejay Ram Nakra, Chief of Sales and Marketing at the automotive division. "We are optimistic and hopeful of a good festive season going ahead." M&M also reported 17 per cent fall in its farm equipment sector.
It sold 13,871 tractors in the domestic market during August 2019 compared to 16,375 units in the same month of last year, marking a 15 per cent decline. The exports of tractors declined by 33 per cent to 946 units from 1,410 in August 2018.
The auto industry employs over 3.5 crore people directly and indirectly. Representatives of major automobile manufacturers have urged Finance Minister Nirmala Sitharaman and sought lowering of Goods and Services Tax (GST) from 28 per cent to 18 per cent. She said in Chennai on Sunday that the GST Council will take a call on the issue.
The slowdown in auto sales stems from a severe liquidity crunch in the non-banking financial sector which has dried up lines of credit to both auto dealers and potential car buyers.
On August 23, Sitharaman announced that government departments will be allowed to buy new vehicles, automobiles purchased till March 31 next year can avail the benefit of additional depreciation of 15 per cent with total depreciation up to 30 per cent, and BS-IV vehicles bought till March 31 next year will remain operational for their entire registration period.