‘Turmoil’ is the term being used for the current state of the Indian Automotive Industry. However, we would want to say that the overall economy is going through a course correction and is a resultant of multiple Government policies – Demonetization, GST, Upcoming BS-6 Implementation to name the few. The way the slump in volumes is extending has put a lot of pressure on the OEMs, Auto Component Makers, Suppliers and Dealerships to rationalize cost and reduce inventories. The same has effected the blue collar jobs the most and has resulted in massive job losses across the channel. This course correction needs to stop at a particular point and the time is now! Any more extension in the slump can be ‘deadly’.
The Passenger Vehicle Industry saw a volume of 1,95,800 units in Aug’19 v/s a sale of 2,82,809 units in Aug’18 and reported a massive YoY degrowth of 30.8%! Surprising is the fact that the drop in volumes is even after adding the numbers of 2 new entrants – MG & Kia. It is clearly evident that both OEMs and Dealerships are correcting stock levels and are highly wary that any unsold stock by March 2020 shall have a negative impact on their respective profitabilities.
Kia makes a grand entry and sells 6,236 units in its first month! It already garnered a Market Share of 3.2% and exceeded the volumes of the likes of Renault, Ford, VW, MG, Nissan, Skoda & Jeep!
Maruti+Nexa loses the highest market share and the MS dropped by 3.9% to 47.6% in Aug’19. Maruti’s loss was Hyundai’s gain and Hyundai registered a Market Share of 19.5%!
The next biggest market share was seen for Tata Motors. The Wholesale has really taken a backseat and the Indian OEM is consistently losing numbers month after month. Even the much touted Harrier couldn’t garner the expected volumes for the OEM.
MG is gaining ground slowly and is consistently doing more numbers than Nissan, Skoda & FCA. MG should now be aligning its production capacity to meet the customer demand.
Market Shares figures for Aug’19 –