India Sales

Ammar Master, Senior Manager, Asia Pacific Vehicle Forecasts

29 April 2019

Light Vehicle wholesales came to a standstill in Q1 2019.

India’s Light Vehicle wholesales came to a standstill in the first quarter of 2019. Total Light Vehicle volumes in the January-March period fell by 0.3% year-on-year (YoY) to close the quarter just north of 1 million units.

The downturn in the Personal Vehicle market is largely to blame for this nearly flat performance. The segment declined by 3% YoY to 794,000 units as consumers are taking a wait-and-see approach until the completion of the general elections in April/May. A slowing economy, a weak rupee and tight credit conditions (despite a recent interest rate cut) are dampening sales, too.

On the positive side, demand for Light Commercial Vehicles up to GVW of 6 tonnes remained robust. In the year through to March, Light Commercial Vehicle sales surged by 12% YoY to 213,000 units.

Weak retail demand prompted vehicle manufacturers to slash Light Vehicle output by 3% YoY to 1.20 million units in the year so far. Personal Vehicle production dropped by a significant 6% YoY, versus an 11% YoY upturn in Light Commercial Vehicle output.

As buyers will wait for political clarity before making big-ticket purchases, we anticipate Light Vehicle sales – particularly in the Personal Vehicle segment – to remain under pressure in the second quarter. This leads us to forecast a 5% YoY contraction in the market for the April-June period. A small rise of 1% is predicted in the third quarter, before a double-digit surge in the final quarter of 2019.

“We expect pre-buying of BS IV-compliant vehicles towards the end of the year.”

Not only will the festival season drive up volumes towards the end of the year, but we also expect pre-buying of BS IV-compliant vehicles prior to the implementation of BS VI (equivalent to Euro VI) emissions standards on 1 April 2020.

In spite of the weak buyer sentiment and challenging macroeconomic conditions, India’s Light Vehicle market is still forecast to breach the 4 million-unit threshold for the first time in its history. Overall, sales are predicted to reach 4.05 million units (+2% YoY). It is, however, important to remember that this will mark the slowest rate of sales growth since 2015.