M&M’s total domestic vehicle sales down 16% in July

Mumbai: Mahindra & Mahindra (M&M) reported a decline of 16% year-on-year (YoY) in its total domestic wholesales to 37,434 units in July, as the economic downturn continues to hurt the auto industry.

The company’s passenger vehicle wholesales fell 15% YoY to 16,831 units during the month, while commercial vehicle sales declined 17% to 15,969 units. The drop in wholesale numbers hint at more production cuts, which automakers have been undertaking to manage unsold inventory.

The company had reported a decline of 2% YoY and 9.4% YoY in passenger vehicles and commercial vehicles, respectively, in the first quarter of the current fiscal, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

For M&M, the bigger decline in CV sales came from subdued sales in the light commercial vehicle (LCV) category, where the Bolero range of light trucks-- under 3.5 ton--dominates. It reported total domestic sales of LCVs, below 3.5 tons, at 14,874 units in July, down 16% YoY.

The fall in demand for LCVs is a clear indication that small and medium enterprises (SMEs) have also been hit.

The medium and heavy commercial vehicle (M&HCV) category, which primarily reflects the economic health of sectors such as transportation and infrastructure, has reported a drop of 52% from 866 units sold in July last year to 417 units last month.

Commenting on company’s monthly sales performance, Veejay Ram Nakra, chief of sales and marketing, automotive division, M&M said “the headwinds faced by the automotive industry continue as a result of subdued consumer sentiment, triggered by various factors. The industry needs stimuli to help revive consumer demand. We hope that the overall buying sentiment will improve in the run-up to the festival season and with the monsoon turning out to be better than initially anticipated."

Meanwhile, M&M’s farm equipment sector reported a decline of 11% YoY in domestic tractor sales to 19,174 units in July. At 818 units, tractor exports fell 26% YoY.

Rajesh Jejurikar, president - farm equipment sector, M&M Ltd, hopes that the spread of monsoon, government initiatives focused on boosting rural incomes and an overall improvement in liquidity would spur tractor demand during second half of the current fiscal.

Mahindra India