From the looks of it, FY2020, or the first half at least, is going to be a very tough one for the Indian passenger vehicle industry. Market leader Maruti Suzuki, which opened FY2020 with sales of 131,385 units (-19.6%) in April 2019, has seen slower sales in May 2019. At an overall 121,018 units despatched, its sales last month are down a substantial 25 percent year on year (May 2018: 161,497).
If the UVs were the sole sub-segment in April 2019 to be in positive territory, then they too have entered negative zone in May 2019, which means all of Maruti's sub-segments' sales are in the red in May 2019 (see detailed sales table below)
May 2019 sales performance
The entry level passenger car duo of the Alto and old Wagon R hatchbacks sold a total of 16,394 units, down 56.7 percent year on year (May 2018: 37,864). The seven-model compact car lot (new Wagon R, Swift, Celerio, Ignis, Baleno, Dzire, Dzire Tour S) accounted for 70,135 units, down 9.2 percent (May 2018: 77,263).
The premium Ciaz sedan saw its sales decline by 10.7 percent to 3,592 units (May 2018: 4,024). Now, equipped with a new 1.5-litre diesel engine, the Ciaz could see some much-needed traction. The rate of sales decline in May is slower than it was in April 2019.
The quartet of utility vehicles (Gypsy, Ertiga, S-Cross and Vitara Brezza) has also seen de-growth with despatches of 19,152 units, down 25.3 percent (May 2018: 25,629).
The van duo, Omni and Eeco, were down in May 2019 with 11,745 units, which marks a de-growth of 29.7 percent (May 2018: 16,717).
Do the math and overall domestic PV sales for Maruti Suzuki last month totalled 121,018, about 10,000 units less than in April 2019m and down a substantial 25.1 percent over a year-ago numbers (May 2018: 161,497).
The company, which is targeting combined sales of 2 million PVs in the year FY2020, was about 137,551 units short of that milestone in FY2019. It will have to recharge itself with an aggressive model and sales strategy if that 2020 goal is to be achieved. From the looks of it, that 2020 vision seems far away.
If there is a positive, then it is in the Super Carry small commercial vehicle's numbers. At 2,232 units in May 2019, it has recorded 31 percent YoY growth, albeit on a low base.
All said and done, Maruti Suzuki's current performance is not good news for the industry. As they say, when Maruti Suzuki sneezes, the rest of the industry catches a cold. The bellwether of the PV industry, which recently announced its decision to dive out of diesel from April 2020, is experiencing a slowdown like never before. Expect the company to engage in intensive product development programmes, some adriot marketing moves and judicious decisions to regain traction in what still remains one of the world's biggest marketplaces for passenger vehicles.
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