Tough time keeps for car agencies

Highlights:

• – A disappointing set of February sales numbers through car majors throughout all segments
• – New axle load norms, tight liquidity, and non-availability of finance weigh on business automobile manufacturers
• – New product launches aiding passenger vehicle and wheeler income

Challenging times lie ahead for vehicle majors, with their income numbers for February declining. The decline is due to subdued purchaser demand sentiment due to slowing economic output, tight liquidity, non-availability of retail finance, better interest rates, and little economic activity in advance of popular elections scheduled for April-May.

Commercial automobile (CV) phase numbers were mixed for gamers in this space. The segment continues to face demanding situations because of new axle load norms, coupled with liquidity crunch and non-availability of retail finance. In February, the tractor segment became weak due to a better base of the previous year and subdued farm sentiment.

Three-wheeler (3W) income was combined because of the excessive base of the ultimate 12 months. Two-wheeler volumes were additionally combined for players in this area. Passenger automobile (PV) sales remain disappointing due to the better value of possession, the high base of the remaining year, and unfavorable macro factors.

Commercial automobile continues to be under pressure. A negative impact of the latest axle load norms and macro demanding situations, led by liquidity issues, financing issues, growing interest costs, and a slowdown in economic activity, has dampened client demand sentiment for CVs. The lengthy outlook continues to stay advantageous due to cognizance of production and infrastructure, a nd a boom in mining activity.

Company-wise, Tata Motors registered a 9 percent 12 months-on-12 months (YoY) decline in CV volume, led by 17. Three percent and 0.7 percent fall in the medium and heavy commercial vehicles (M&HCV) and light industrial automobile (LCV) segments. Volvo Eicher Commercial Vehicles (VECV) also witnessed a 6.7 percent drop. Ashok Leyland and Mahindra & Mahindra (M&M) published flat growth in their monthly volumes because of a decline in M&HCV phase volumes, but this was partially offset by an upward thrust in LCV volumes.