Auto sales propelled by sentiment

Eight of the country's leading automobile manufacturers who released their sales data today together sold 183,176 units in July

Car makers in India reported a 11.3 per cent jump in sales in July, the third month of rising demand. Eight of India’s leading makers who released their data on Friday sold 183,176 units in the month compared to 164,572 units in July 2013.

Leading the tally was Maruti Suzuki, which clocked a growth of 19.9 per cent to sell 90,093 units in the domestic market last month. While sales of Maruti’s small cars Alto and WagonR declined 14.4 per cent to 28,759 units, the demand for premium models improved. Sales of the Swift, Ritz and Celerio increased 81.2 per cent to 25,156 units; of sedan DZire by 22.2 per cent to 18,634 units; of utility vehicles Ertiga and Grand Vitara 23.4 per cent to 5,631 units; and of vans Eeco and Omni by 54.8 per cent to 11,680 units.

A new and stable government at the Centre seems to have boosted consumer sentiment, with buyers returning to showrooms, said people. (Click here for table)

South Korean automobile company Hyundai grew volumes 12.7 per cent to 29,260 units during July. Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai Motor India Ltd (HMIL), said: “The demand created by successful product launches and strong channel spread has brought down discounts and shoots are visible, with the stabilisation of macroeconomic factors and near-to-average monsoons.”

Kumar Kandaswami, senior director at Deloitte Touche Tohmatsu India, said: “Two months saw some panic buying in anticipation of tax increases and the release of some pent-up demand. For sustained growth to happen, one would want to see six months of growth in disposable income over inflation and the increase in levels of household savings. It is important entry segments gather speed as those customers are the most affected by inflation and lack of income growth.”

Launches helped boost numbers for Honda Cars India and Toyota Kirloskar. For Honda Cars India, the new Mobilio (3,365 units), Honda City (7,705) and Amaze (4,507) helped grow sales 40 per cent. The sedans contributed 78 per cent to Honda’s overall passenger vehicle sales in the domestic market.

For Toyota, the new Corolla Altis and Etios Cross accounted for 1,770 of 11,921 units sold last month. Companies are looking to the festive season to further spruce sales numbers. N Raja, director and senior vice-president (sales and marketing) at Toyota Kirloskar Motor, said: “Both the Corolla Altis and Etios Cross have been well accepted. We look to a further improvement in sentiments with the beginning of the festive season.”

“There are indicators to suggest a gradual revival in sentiment in the past few months, including cues from the stock market and a steady improvement in the manufacturing index. As we approach the festive season, we expect a significant increase in footfall. We have improved supplies to speed deliveries for all models to meet the expected rise in demand,” said Vinay Piparsania, executive director of marketing, sales and service, Ford India.

Home-grown Tata Motors and Mahindra & Mahindra (M&M), with no new launches, continued to see sluggish demand. While Tata Motors’ sales fell 15 per cent to 9,167 units, M&M’s were down 5.3 per cent to 14,708 units.

Pravin Shah, chief executive (auto division) and global operations, M&M, said: “The overall sales during the last month were subdued and the market remained challenging. With the monsoon setting in across the country as well as the ensuing festival season, we expect positive sentiments in the coming months, resulting in enhanced demand for our products.”