Deep discounts fail as car sales are set to fall for the ninth straight month in July

  • Market research reports say that July is going to see car sales continue to remain weak across all segments.
  • This also means that discounts per car are increasing heavily, Maruti Suzuki is leading the monthly discounts race.
  • Most car manufacturers saw their sales decline in the Q1 of FY20, also affecting their profits.
Car sales have been slipping for the last eight months, and experts are predicting a tepid July month as well.

As expected, manufacturers are rolling in discounts every month, to help push sales. Maruti Suzuki is leading the way with most ‘total cash discounts’ offered to consumers. While Alto models saw an 8% increase in discounts as compared to June, the Celerio Automatic and Dzire Diesel versions saw a steep increase of 23% and 27%.

Weak sales to continue

July isn’t going to bring in any cheer for carmakers who are hoping for good sales, according to a research report released by Emkay Global. “Volume performance is expected to remain weak across segments due to a high-base effect, increasing cost of vehicle ownership, monsoon deficit and financing issues,” the report said.

CompanyExpected YOY drop in Sales
Maruti Suzuki20.9%
M&M Auto7.4%
Tata Motors12.1%
Hero Motocorp11.7%

The quarterly earnings reports of auto manufacturers also spell doom for the industry.

India’s largest car manufacturer Maruti Suzuki’s profits fell by 27.3%. It total sales for the first quarter of FY20 fell by 17.9% as compared to the same quarter last year. Meanwhile, Tata Motors’ saw its cumulative income (Jaguar Land Rover included) dropped by 20%.

And, the manufacturers are beginning to blame the government. “There is no demand and no private investment, so where will growth come from? It doesn’t fall from the heavens. The auto industry is going through a very difficult period. Cars, commercial vehicles and two-wheelers are going through a rough patch,” Rahul Bajaj, Chairman and MD of Bajaj Group said at his company’s annual general meeting.

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