Tata Motors Posts 26 Per Cent Drop In Sales In May 2019

Tata Motors' domestic passenger vehicle sales declined by 38 per cent in May this year, even as retail grew by 11 per cent backed by product updates and micro-segmenting.

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The Indian auto sector has been reporting a slump in new car sales over the past months and the month of May 2019 has been no different. Tata Motors announced its sales for the previous month and the company has registered a drop of 26 per cent in overall sales. The company sold a total of 40,155 units in May this year, as opposed to 54,290 units sold during the same month last year. The automaker's year-to-date sales were also on a drop after back-to-back declining numbers, with 82,684 units sold between April-May 2019, a de-growth of 23 per cent as compared to 107,758 units sold during the same period in 2018.

Also Read: Maruti Suzuki's Total Numbers Down By 22% In May 2019

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Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors said, " In view of higher vehicle stocks in network our strategy was to focus on retails. While the market sentiments continued to be muted, our exciting products and micro segmenting strategy helped in improving retails. In May 2019, our retail sales have shown a growth of 11% over May'18. Despite this challenging environment, our UV segment continues to grow at 13% on the back of a strong UV portfolio. We expect that post- election industry will start improving gradually. In the months to come, we are positive to bounce back with our robust product lineup and strive towards driving volumes and increasing our market share as part of our on-going turnaround journey."

With respect to passenger vehicle sales, Tata registered 10,900 units in May 2019, witnessing a hefty drop of 38 per cent over 17,489 units sold in May last year. That said, the automaker stated that retail sales recorded an 11 per cent growth last month, backed by new and updated products as well as micro-segmenting strategy. The UV segment sales too grew by 13 per cent in May 2019. Cumulative sales growth between April-May 2019 for passenger vehicles in the domestic market stood at 23,594 units, a decline of 32 per cent over 34,724 units sold during the same period last year.

The commercial vehicle (CV) business also a 20 per cent drop in volumes with 29,329 units sold last month, as against 36,806 units sold in May 2018. Tata Motors attributed the declining sales to weak market sentiments due to depressed freight rates and underutilisation of trucks. The year-to-date CV sales in the domestic market also saw a decline of 19 per cent with 59,212 units, as compared to 73,082 units sold during the same months (April-May) in 2018.

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The SCV cargo and pickup segment is expected to improve volumes backed by a normal monsoon

The M&HCV sales dropped by 38 per cent at 7,683 units in May this year, as compared to 12,424 units sold in May 2018. The revised axle load norms still pose a challenge for the heavy vehicle segment to grow, according to the manufacturer. Tipper sales too dropped by 22 per cent with 2539 units sold in May this year, as against 3261 units sold during the same month last year. The I&LCV truck sales in May 2019 declined by 2 per cent at 4043 units over 4106 units sold in May 2018. This segment has been relatively less affected by the revised axle load norms. E-commerce and discretionary consumption have been the two main drivers of I&LCV volume. Tata did say that new products in the 15-16 tonne segment and CNG products were well accepted in the makret and contribute over 10 per cent to the volumes.

The SCV Cargo and Pickup segment witnessed a drop of 18 per cent with 12,695 units sold in May 2019, as compared to 15,558 units sold in May 2018. The slow consumption in rural areas was attributed as the main reason in the drop of volumes, which is likely to improve with a normal monsoon. The commercial passenger carrier segment sales stood at 4908 units in May this year and grew by 4 per cent. The Company is gearing up for the supply as per the new regulations, AIS 153, backed by strong demand for the Winger series.

Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors said, "Tata Motors Commercial Vehicles (CV) Business sales in the domestic market in May registered a drop of 20% . The M&HCV sales has taken the maximum hit in the domestic market, declining by 38%, at 7,683 units, essentially due to higher capacity post increased axle load, not yet matched by commensurate freight growth. I&LCV truck sales were least affected, with a decline of 2% at 4,043 units as discretionary consumption has been witnessing a slowdown in recent months. The SCV Cargo and Pickup segment also lower by 18% as distress in the agriculture sector brought down rural consumption. The commercial passenger carrier segment sales was higher by 4% over last May. The school season has pushed up demand and is expected to be positive in the next month too. We are expecting an improvement in the economic conditions in the coming months and look forward to an improved buying sentiment."

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Tata Motors reported a cumulative export of 1563 units in May 2019, witnessing a massive drop of 58 per cent over last year. The drop in retail sales in Bangladesh, Nepal and high stocks in the SAARC region, along with the slump in the Middle East, affected the automaker's export volumes.

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