BQSurvey: Auto Sales Expected To Fall In April
Auto sales are expected to decline in the seasonally strong April due to multiple factors including tepid demand, according to a BloombergQuint survey of seven dealers across India.
While the sales may increase on a monthly basis in April, they're likely to remain muted compared with the same period last year. “April is an important month for sales due to the start of the marriage season and festivals like Gudi Padwa, Baisakhi among others,” Nikunj Sanghi, managing director at JS Fourwheel Motors Pvt. Ltd., said. “Sales have seen a pickup over the last month but continue to lag on a year-on-year basis.”
Agreed Ashish Kale, partner at United Automobiles. “Sales growth is most likely to be negative for the overall industry in April barring a few as there is demand fatigue.”
Inventory levels, according to most dealers, have also eased after most original equipment manufacturers undertook production cuts.
Nomura, too, expects a sharp decline in April sales for auto companies largely due to pressure on growth due to higher inventory levels, a higher base last year and weak demand sentiment.
“We expect passenger vehicle industry’s volumes to decline 8 percent and two-wheeler sales to decline by 17 percent year-on-year for the month of April,” Kapil Singh, auto analyst at Nomura, wrote in a note.
Price hikes by auto companies due to added safety features from this month and rise in raw material costs has impacted demand, according to three analysts polled by BloombergQuint.
Here are the factors, according to Nomura, that could impact sales for individual automakers:
Volumes to decline on weak demand especially for the medium- and heavy-commercial vehicle segment.
Growth likely to remain flat on a year-on-year basis for domestic motorcycle business.
Royal Enfield sales are expected to decline due to demand slowdown.
Weak retail and inventory correction to lead to decline in wholesales.
Utility vehicle demand to benefit from new XUV300 launch; tractor growth trajectory to remain weak.
Medium and heavy commercial vehicle and passenger vehicle sales expected to fall 28 percent and 7 percent, respectively.
Growth trajectory to slow on weak demand, especially in domestic market.