The Indian auto giant suffered a setback in its Jul-19 sales numbers as it reported a 34% drop in its total domestic sales. The company could amass 32,938 units in Jul-19 against 50,100 units in Jul-18. The drop in sales mainly due to subdued demand continued to post its drop of 23% in Q1 of FY1920. Last year Q1 TML reported a sale of 2,14,679 units which dropped to 1,68,817 units in Q1 of current fiscal.
The passenger car segment, which has been facing a slow down for the last 10 months, saw TML PV sales dropping by 31% to 10,485 units in Jul-19. Overall, in Q1 of current fiscal at 47,430 units, Tata Motors reported a decline of 32% in sales. The company has taken a slew of initiatives in to boost sales in FY1920 and in this process, TML has added 48 new sales point during first 4 months of current fiscal, across the country including 30 new outlets which were added in Jul-19. The TML channel partners also added 2600 sales executive to boost the sales.
The drop in the CV segment in Jul-19, was even bigger for TML as it reported a drop of 36% at 34,817 units in Jul-19. The M&HCV segment was the worst affected registering 46% drop at 5465 units. The I&LCV dropped by 21% to 3167 units and the SCV/pickup segment dropped by 30% unit to 10,937 units. The commercial passenger carrier segment witnessed a drop of 42% at 2,884 units. The major economic factors for low sales were the slowing economy, excess capacity formed because of increased axle load norm, the slowdown in the execution of infrastructure projects, drop-in discretionary consumption, and poor liquidity conditions in tight financing environment.
To overcome the external environment TML focused on system stock reduction (including dealer stock), in light of significant contraction in demand, and impending transition to BS-VI towards the end of the year, necessitating consumption of entire BS-IV stock by year-end. The only ray of hope for TML was that its retails sales were higher than the wholesale by 38%, thereby reducing the dealer stock considerably.
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