Auto sales pick up in August as consumer sentiment improves

Uptick limited to top 3 carmakers as most others see dip; look to policy driving demand

Improved market sentiment has continued to boost sales of passenger vehicles. Nine of the country’s leading automobile manufacturers together sold 200,174 units in August as compared to 169,809 units sold in the same month last  year.

Maruti Suzuki, Hyundai and Honda together accounted for 80 per cent of the sales, reported by manufacturers on Monday.

Maruti Suzuki’s grew 29.3 per cent over a year earlier, to sell 98,304 units in the domestic market last month. Sales of its small cars, Alto and WagonR, rose 8.3 per cent to 34,686 units. Demand for its premium models also improved — sales of the Swift, Ritz, DZire and Celerio increased 53 per cent to 46,759 units. Those of utility vehicles Ertiga and Grand Vitara rose 20.3 per cent to 5,491 units, and of the Eeco and Omni vans by 25.6 per cent to 9,990 units.

Korea’s Hyundai grew volumes by 19.2 per cent to 33,750 units. Rakesh Srivastava, senior vice-president (sales and marketing), said there was “overwhelming response for the new products such as Elite i20, Xcent and the Grand. We maintain a cautious optimism for a good festive season, on the strength of new products, increase in demand for petrol cars and improving customer sentiment”.

Launches of new vehicles helped boost numbers for Honda Cars India. Its new Mobilio (5,530 units) and the Amaze (9,198 units) helped grow sales by 88 per cent. The sedans contributed nearly 90 per cent to Honda’s overall passenger vehicle sales in the domestic market last month. Production of its flagship sedan, City, had temporarily stalled in August; production is being shifted to its facility in Tapukara (Alwar, Rajasthan).

Jnaneswar Sen, senior vice-president (marketing & sales), Honda Cars India, said: “We are extremely happy to witness consistent growth for Honda cars month after month. The festive season will bring further cheer to the market. We are geared up for strong sales in the coming months.”

A new and stable government at the Centre seems to have bolstered consumer sentiment, with buyers back to showrooms for major car makers. Still, industry observers are cautious. Kumar Kandaswami, senior director, Deloitte Touche Tohmatsu India, said: “The spurt in growth seems to be more on account of the prevailing sentiment than on hard economic data. There might be a tapering of demand if the economic parameters remain weak in the coming months. If inflation goes down and if investment begins to flow into the important sectors, triggering growth in disposable income, the growth in demand for cars will be sustained. The spurt in sale before the festival season will, therefore, be dependent upon the demand drivers improving significantly in a timely manner.”

His apprehensions are reflected in the sales volumes of General Motors, Ford India, Toyota Kirloskar, Mahindra & Mahindra (M&M) and Tata Motors. All of them reported a dip in sales last month. Those at Ford India dropped 15 per cent to 6,801 units and those of GM slipped 36.6 per cent to 4,232 units. “There is some positive movement in the market because of new entries. However, the buoyancy is still missing and we expect the market to improve only during the festival season,” said P Balendran, vice-president, GM India.  At Toyota, volumes went down 6.6 per cent to 11,215 units.