Festivals gone, gloom back for car makers

Costlier fuel & finance, tighter lending norms pull down demand 8% y-o-y in November

Demand for automobiles remained weak after the October-November festive season, with eight of the country's leading vehicle makers together registering a decline of eight per cent at 179,821 units sold in November against 195,513 in the corresponding month last year.

High fuel prices, expensive finance and tighter lending norms, among other reasons, hit demand in the month. Wholesale volumes for Maruti Suzuki dropped six per cent to 85,510 vehicles in the domestic market. While sales of entry-level models such as M800, Alto, WagonR and A-Star grew 3.7 per cent to 38,040 vehicles, demand for Swift & Estilo Ritz compact hatchbacks and Gypsy & Ertiga utility vehicles dipped 24 per cent (18,122) and 21.5 per cent, respectively.

Korean auto giant Hyundai Motor India also saw domestic volumes falling 3.6 per cent to 33,501 vehicles in November. After the festival season, the market has remained sluggish because of a slow economy and poor market sentiment resulting in lower enquiries, said Rakesh Srivastava, senior vice-president (marketing & sales), Hyundai. (VROOMING AHEAD)

Falling demand for diesel-powered models took its toll on Mahindra & Mahindra (M&M) and Tata Motors.

While sales for Tata Motors declined 42.5 per cent dip to 10,376 vehicles in November, utility vehicle market leader M&M registered a dip of 32 per cent selling 16,771 passenger vehicles during the month.

What is of concern is the aggregate drop in sales for Tata Motors has come despite the company introducing refreshed variants of the Nano, Indigo CS and the Sumo before the festive period under its Horizonext campaign.

Toyota’s sales in the domestic market fell 1.4 per cent to 10,208 vehicles in November. Sandeep Singh, deputy managing director and chief operating officer, (marketing and commercial), Toyota Kirloskar Motors, said, “The market continues to be sluggish and market sentiments are not expected to improve in the coming months.”

Interestingly, car makers such as Honda and Ford, which has launched Amaze and EcoSport recently, bucked the trend and continued to see demand.

While sales for Honda Cars India more than doubled to 9,332 vehicles, for Ford it went up 33 per cent to 7,909. For Honda, Amaze contributed 82 per cent to the company’s monthly sales.

Jnaneswar Sen, senior vice-president (marketing & sales), Honda Cars India, said, “Led by strong demand for Honda Amaze, Honda has experienced robust sales month after month since April 2013.”