Jeeto and Super Carry sales plunge in February
Published On Mar 19, 2020
The top-selling mini truck models recorded a sharp drop in the month partly due to production cut and customer postponing fresh purchases. Will the sales come back?
India’s top-selling compact trucks, the Jeeto, Super Carry and Ace range, suffered a massive drop in February owning to several factors. This segment is mostly insulated from what happens in the broader economy, unlike their medium and heavy-duty truck prospect is directly linked to the underline economic growth in the country.
The customers in these segments largely depend on consumption at the local level, which has been consistent as, despite the massive fall in the heavy truck, this segment saw a moderate demand-pull, and the decline was more restrained. And, yet, February sales sank massively for these trucks.
The overall mini truck segment monthly industry volumes are above 20,000 units, which have dropped by 50% to 11,500 units in February. The mini truck is the second largest segment, after pickups, contributing nearly 20% of the overall truck’s sales volumes. The Jeeto, Super Carry and Ace range of mini truck numbers declined 1,220 units (73%), Super Carry 448 units (79%) and Ace range 9,912 units (26%) in the month, this is extraordinarily low sales for these popular trucks. While Jeeto and Super Carry are down, Ace range despite a drop remains strong in the segment with an unprecedented 85% market share, highest in recent years.
The production numbers dropped almost 50% in the month also indicates to what extends OEMs limited the plant capacities. M&M produces only 1090 units of Jeeto in the month (Feb’19: 4,855 units), Maruti Suzuki Supper Carry 563 units (Feb’19: 1,409 units), and Tata Motors 9,863 units (Feb’19: 13,165 units).
However, the fall is the result of several factors coming together to impact the overall sales. OEMs cautious approach to BS4 vehicles by production cuts to limit the unsold stock. Similarly, the ambiguity around the registration of BS4 vehicle until the 31st March and, therefore, finance companies shying away from releasing loans. On top of this, customers turning to vary about buying new vehicles amidst uncertainty around prices, finance and registration process, thus, postponing their purchase decisions.
Will the trend reverse?
While the industry is going through temporary disruptions in various ways, but the real question is, will the sales trend reverse? At present, nobody knows the answer. It will take a few weeks before the clarity emerges. Earlier, the consensus was that the demand would improve marginally in the first quarter of FY21 as the customer who stayed away from fresh buying would return; however, this prospect is in the limbo due to the unprecedented shutdown due to coronavirus, further mounted the problem for the industry.
This couldn’t have been more inappropriate time for the auto industry to move to BS6 emission norms, as supply chains are disrupted, production is coming to a near halt. This will adversely impact the overall sales for the industry across the segment, and quite evident that March sales likely to take a massive hit, which will be the final setback of the sector before some positive development starts to return.
Stay tuned as we track the industry performance in the weeks and months to come.