Between August and October, production has continuously declined, falling by 38.4 per cent. Telcos October production at 2,002 vehicles, represents one-third its monthly average output in the first half, and is truly representative of the plight of the industry.
The drop in inventory levels by 3,019 vehicles in October over the September level is not due to a genuine increase in demand. Sales in September rose 37.8 per cent due to the demand from customers to buy vehicles and avail of the resultant tax benefits. Another contributing factor to higher sales has been the discount offered on purchases to boost demand and improve first half performance.
Any hopes of a recovery have been dashed by the 27.4 per cent decline in sales volume in October over the previous month. Also, analysts expect a poorer performance by the medium and HCV segment in November as no significant improvement in sales is perceived.
In the first half of 1997-98, the light commercial vehicle (LCV) segment managed to escape with a marginal sales drop of 3.3 per cent. This was largely aided by the 40 per cent growth recorded by Sumo which is also classified under this segment.
In the last three months, LCV production has remained stagnant while sales have recorded a decline. Sales fell by 23.6 per cent in October over the August level. This was mainly due to a major sales drop of 36.1 per cent in Telcos LCV division between August and October. Analysts opine that the drastic sales drop in this segment is due to a slowdown in the Sumo sales growth. They feel that though Sumo sales continue to be steady, it will be difficult to sustain the rapid growth achieved in the past.
