With the pent-up demand getting exhausted and the overall economy reeling under the impact of rising inflation and the after-effects of two waves of COVID-19, auto sales seem to be coming under pressure post the festival period.
Two of the earliest companies to report their November numbers, Bajaj Auto and tractor maker Escorts, have both reported sharp declines in their November sales.
Bajaj Auto’s domestic sales once again fellow below its exports, after falling 23% on year to 1.45 lakh, while exports were largely flat year-on-year at 1.93 lakh.
Overall, therefore, there was a dip of 12% in November sales of two-wheelers this year at 3.38 lakh vs 3.85 lakhs last year.
Sales of three-wheelers were not as impacted, largely because of the low-base effect, having never fully recovered from the impact of COVID.
Total three-wheeler sales, including exports, were up 10% at 40,803 units, largely on the back of a 20% jump in domestic market sales at 13,802 units.
Escorts Agri Machinery too reported a 30% decline in November sales at 7,116 tractors vs 10,165 tractors sold in November 2020.
The decline was entirely in the domestic market, with exports actually increasing by 121 units to 624.
However, domestic market sales were down 33% to 6,492 units from 9,662 units in November of last year. However, the company said it was not overly concerned about the numbers.
“Delayed harvest of Kharif crops owing to late monsoon rains this year affected the rural cash flows and hence the retail demand.
“This we believe is a temporary phenomenon and cash flows should start improving soon as Kharif harvest gets fully monetized. Industry wholesale in November was further impacted by post-season channel destocking. Going forward all macroeconomic factors remain in favour of the tractor industry. However high inflation remains a worry impacting profitability,” the company said.