Escorts tractor sales increase while sales of Bajaj vehicles plunge

The automobile sector in India is witnessing a lot of fluctuation in sales. While the sales of Bajaj Auto Ltd’s motorcycles and other vehicles has shown a downward trend in October, there was some cheer in store for farm equipment and engineering company Escorts Ltd as their tractor sales increased by 1.6% in the same month. The overall slowdown in the auto industry is blamed on the bad festive season last year.  

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Tractor sales rise 

Escorts Ltd. reported in a regulatory filing that it had sold 13,353 tractors in comparison to 13,140 units in September. As a whole, domestic tractor sales were 13,034 in October this year. This was a growth of 1.3% from 12,867 tractor units sold in October 2018. On the other hand, 319 tractors were exported to various countries in October as against 273 units in the month of September, displaying a phenomenal growth of 16.8%. 

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Other vehicle sales continue to suffer 

However, there has been a 9% decline in the total vehicle sales of Bajaj Auto Ltd at 4,63,208 units in October. In the same period last year, it had sold 5,06,699 vehicles. The domestic sales fell by 13% from 3,19,942 units in October 2018 to 2,78,776 units in October 2019. Similarly, motorcycle sales were down by 14% from 2,81,776 units in October this year to 2,42,516 units in the same period last year. The sales of commercial vehicles also did not buck this trend declining by 5% in comparison to October 2018. The exports of Bajaj Auto Ltd too dipped by 1% from last year.  

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Reasons for the decline 

Some of the reasons for the decline in automobile sector sales are the problem of higher inventories, tight liquidity with banks as a fallout of the NBFC crisis and lower consumer sentiment. Nearly 280 dealerships have shut their business in the last 18 months. The ancillary sector, which depends on the performance of the original equipment manufacturers is also undergoing problems. There are fears that a prolonged lean season would result in job losses.  

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(With PTI inputs)