Indian automobile production saw mixed reactions from two key manufacturers in December 2019.
Low demand in Dec, and preparation for upcoming implementation of BS-VI emission norms, drew different strategies from Tata Motors and Mahindra & Mahindra.
Tata Motors reported a drop-in production volume as it adjusted inventories, anticipating demand to remain bearish given the new emission standards.
Automaker Mahindra & Mahindra, on the other hand, increased production, expecting improving demand in 2020.
The impact on finished steel demand in India, was that signs of recovery were seen, with prices for hot rolled coils (HRC), used majorly in automobile manufacturing, rose to Rs1,500-2,000/mt ($21-28) by the end of December.
Despite improved profits for steel mills on the higher steel prices, demand picking up in the auto sector is far from a certainty, said a trader.
Tata Motors cut production by 16.17pc to 48,350 vehicles in December 2019, from the 57,897 units during the same period a year prior, according to a regulatory filing by the company.
In December 2019, the production of passenger vehicles stood at 9,552 units down from 12,673 units, or 24.62pc, from the same period the prior year. The production of commercial vehicles was at 29,426 units, down 9.6pc from 32,551 units in December 2018.
The company exported 2,649 units in December down by 33.7pc from 3,999 units in the same month the prior year. In terms of domestic sales, Tata Motors reported a decline of 12pc to 44,254 units from 50,440 units in December 2018.
Mahindra & Mahindra
Mahindra & Mahindra auto production rose 22.54pc to 33,888 units in December 2019, from 27,653 units in the same month the year prior.
In December 2019, Mahindra’s passenger vehicles production was at 15,282 units from 12,333 units in December 2018, up by 23.91pc per cent. The production of commercial vehicles rose 21.44pc to 18,606 units from 15,320 units in December 2018.
The company exported 2,149 units in December, down by 30pc from 3,065 units in the same month the prior year. In terms of domestic sales, the company reported a marginal increase by 1pc to 37,081 units from 36,690 units in December 2018. It sold 15,691 units of passenger vehicles and 16,018 units of commercial vehicles in December 2019.
Mahindra Electric produced 57 e-vehicles in December.