The auto sales data for November indicates that although there are some minor green shoots, there is no durable recovery in the sector just yet. In fact, segments like commercial vehicles are still reeling under pressure.
Eicher Motors reported a 24 percent year-on-year fall in commercial vehicles to 3,594 units while Ashok Leyland's truck segment sales halved in November to 3,676 units resulting in an overall de-growth of 22 percent in sales to 10,175 units.
The passenger vehicle sector paints an equally bleak picture. Maruti Suzuki, the market leader in the space, reported a fall of 1.9 percent YoY and 1.2 percent quarter-on-quarter in November sales. Although, the data suggests that the pace of fall has reduced, there is no conclusive recovery yet barring the compact car segment which saw a minor growth of 1.8 percent YoY.
Even in the two wheeler space, market leader Hero MotoCorp saw a 15 percent YoY fall in sales to 5.16 lakh units, indicating no recovery in sight. Exports came to the rescue for Bajaj Auto which restricted the two-wheeler maker's overall fall in sales to 1 percent. Domestic sales for Bajaj Auto, on the other hand, saw a doube digit decline.
In an ominous sign of things to come, there are bigger headwinds for the sector over the next few months.
As companies transition from BSIV to BSVI from April 1, 2020, the cost of vehicles will increase further, weakening demand even more. Post the transition to BSVI emission norms, the price of petrol vehicles is expected to see an increase of Rs 10,000 to Rs 20,000 or more, with their diesel counterparts expected see a hike of up to Rs 1 lakh or more.
This is due to the higher cost of upgrading diesel vehicles to BSVI norms. At a time when the industry is going through turbulent times, these costs could stifle the sector further.
Highlights from the November auto sales data: