BQ Survey: Weak Demand, New Emission Norms Hurt Auto Sales In January

Weak consumer demand and the shift to the stricter Bharat Stage-VI emission standards hurt retail auto sales in January, according to a BloombergQuint survey of eight large dealerships.After a festive-season spike in October and November, retail sales had moderated in December. Attractive promotional offers in the previous month were rolled back January as inventory fell.“As inventory situation has improved drastically, the need for discounts too has reduced,” said Vinkesh Gulati, director at United Automobiles, a dealer of Mahindra vehicles. “Customers who are hopeful of such offers are waiting for any last-minute purchases ahead of the BS-VI deadline.”According to R Chandrashekhar, executive director at Regent Honda and Kamal Hyundai, higher costs because of the shift to BS-VI has added to the pressure. “Consumer sentiment continues to remain weak across categories,” he said..Muthoot Capital Says Confusion Over BS-VI Norms To Hurt Two-Wheeler Sales In Q4.Automakers and industry experts had warned about a potential disruption as India moved to stricter emission norms from April. More so because newer vehicles complying with the BS-VI standards will cost more, worsening the nation’s worst auto slum in decades. Dealers are pinning hopes on the Feb. 1 budget.There hasn’t been a substantial pick-up in demand even as sales improved over the previous month due to the wedding season and festive buying on Makar Sankranti and Pongal, said Nikunj Sanghi, managing director at JS Fourwheel Motors Pvt. Ltd., a dealer of Mahindra & Mahindra Ltd. The industry expects the government to announce some steps to boost demand in the upcoming Union Budget, he said.Wholesales Likely To FallWholesales, or factory dispatches, are expected to fall in January, according to BloombergQuint’s poll of four brokerages.Here are the factors, according to Nomura, that could impact wholesale volumes for individual automakers:.India Can’t Spend Its Way Out of a Slowdown.Ashok LeylandDemand continued to remain under pressure. However, a pick-up in demand from government projects and state transport unions to restrict volume contraction.Bajaj AutoDomestic wholesales to fall on weak retail sales; export of two-wheelers to sustain growth.Eicher Motors – Royal EnfieldDomestic wholesales to decline on weak retail sales and limited availability of BS-VI models.Hero MotoCorpWholesales to remain slow on weak retail sales.Maruti SuzukiNew product launches and BS-VI inventory to benefit wholesales.M&MMuted demand and high competition to impact utility vehicles. Tractor sales to be slightly positive as rural demand seems to be improving on the back of a good rabi sowing season.Tata MotorsWeak demand due to overall slowdown and surplus capacity to hurt commercial vehicles. However, a pickup in demand from government projects and state transport unions along with BS-VI inventory build-up to restrict contraction.TVS MotorsWeak retail sales to impact wholesales.

BQ Survey: Weak Demand, New Emission Norms Hurt Auto Sales In January

Dealers of cars and two-wheeler expect weak consumer demand and the shift to BS-VI emission norms to hurt retail sales in January.

Choose a plan