 "Car sales hit the slow lane in May")
After a robust double-digit increase of 11 per cent in April, sales growth of passenger vehicles — cars, utility vehicles and vans — from companies to dealers decelerated to over seven per cent in May. The growth was led by the top three players — Maruti, Hyundai and Mahindra & Mahindra (M&M).
Toyota, worst hit by the ban on diesel cars with engine capacity of 2,000cc or above in the national capital region, posted growth after nine months of decline. Tata Motors and Honda continue to report declines in sales, despite new launches.
A key challenge for carmakers would be the jump in fuel prices. Following a price hike of Rs 2 a litre from Wednesday, petrol is at an 11-month high and diesel at an 18-month high. High fuel prices add to the running cost of automobiles and tend to impact purchases. Other roadblocks are in the form of a growing preference for petrol vehicles as diesel cars continue to face regulatory pressure.
Maruti Suzuki, India’s largest carmaker, maintained a double-digit domestic sales growth in spite of a production loss of approximately 7,500 units towards the end of the month. The company sold 113,162 vehicles in the domestic market last month, up 10.6 per cent from 102,359 vehicles sold in May 2015. The growth was driven by an 11 per cent increase in sales of compact cars, driven by its Baleno (launched in October 2015). Utility vehicle segment sales doubled to 13,596 vehicles against 5,567 earlier due to Brezza, which was launched in March.
ALSO READ: PMI shows manufacturing still subdued
Maruti had to stop production at both Gurgaon and Manesar plants on Monday afternoon, owing to a stoppage in supply of car AC units from Subros after a fire damaged the component maker’s Manesar plant. The Gurgaon plant resumed production on Wednesday noon but the Manesar plant would take time. The company managed to grow at this rate in spite of losing production, since it had built an inventory to meet demand in June, when both plants will undergo a planned maintenance shutdown. June sales growth is expected to be moderate.
The second largest player, Hyundai, sold 41,351 vehicles in May, up 10.4 per cent from the corresponding number of 37,450 units last year. Rakesh Srivastava, senior vice-president (sales & marketing), said the market was seeing challenges of stressed rural demand and uncertainty on diesel vehicles. “Hyundai volumes grew 10.4 per cent on the strengths of strong performance of the Creta, Elite i20 and Grand i10.”
Utility vehicle major M&M continued to grow on the back of new launches such as TUV300 and KUV100. It sold 19,635 vehicles, growing eight per cent from May last year. The company said it was happy to grow “in the midst of regulatory uncertainties”.
Pravin Shah, president and chief executive (automotive) at M&M, said: “The favourable monsoon projections will definitely lead to improved buyer sentiment that would likely bring buoyancy in the overall demand across all segments. Going forward, we expect our wider product portfolio will drive growth.”
Data showed that the growth in May, like April, was supported by utility vehicles, especially compact ones such as Creta, Brezza and TUV300.
Renault continued its good performance on the back of Kwid sales. Toyota sales grew six per cent in May, registering its first growth after nine months of decline. The growth was helped by the launch of new Innova Crysta last month. Ford managed to grow sales by 22 per cent on the strength of new models that were launched last year.
Abdul Majeed, partner at Pricewaterhouse, said new launches would drive the growth in the passenger car segment. However, the sudden shift from diesel to petrol vehicles will put a lot of pressure on supply chain ecosystem. Srivastava said if fuel prices remained at these high points, it would add to the cost of ownership and create challenges.
Toyota, worst hit by the ban on diesel cars with engine capacity of 2,000cc or above in the national capital region, posted growth after nine months of decline. Tata Motors and Honda continue to report declines in sales, despite new launches.
A key challenge for carmakers would be the jump in fuel prices. Following a price hike of Rs 2 a litre from Wednesday, petrol is at an 11-month high and diesel at an 18-month high. High fuel prices add to the running cost of automobiles and tend to impact purchases. Other roadblocks are in the form of a growing preference for petrol vehicles as diesel cars continue to face regulatory pressure.
Maruti Suzuki, India’s largest carmaker, maintained a double-digit domestic sales growth in spite of a production loss of approximately 7,500 units towards the end of the month. The company sold 113,162 vehicles in the domestic market last month, up 10.6 per cent from 102,359 vehicles sold in May 2015. The growth was driven by an 11 per cent increase in sales of compact cars, driven by its Baleno (launched in October 2015). Utility vehicle segment sales doubled to 13,596 vehicles against 5,567 earlier due to Brezza, which was launched in March.
ALSO READ: PMI shows manufacturing still subdued
Maruti had to stop production at both Gurgaon and Manesar plants on Monday afternoon, owing to a stoppage in supply of car AC units from Subros after a fire damaged the component maker’s Manesar plant. The Gurgaon plant resumed production on Wednesday noon but the Manesar plant would take time. The company managed to grow at this rate in spite of losing production, since it had built an inventory to meet demand in June, when both plants will undergo a planned maintenance shutdown. June sales growth is expected to be moderate.
The second largest player, Hyundai, sold 41,351 vehicles in May, up 10.4 per cent from the corresponding number of 37,450 units last year. Rakesh Srivastava, senior vice-president (sales & marketing), said the market was seeing challenges of stressed rural demand and uncertainty on diesel vehicles. “Hyundai volumes grew 10.4 per cent on the strengths of strong performance of the Creta, Elite i20 and Grand i10.”
Utility vehicle major M&M continued to grow on the back of new launches such as TUV300 and KUV100. It sold 19,635 vehicles, growing eight per cent from May last year. The company said it was happy to grow “in the midst of regulatory uncertainties”.
Pravin Shah, president and chief executive (automotive) at M&M, said: “The favourable monsoon projections will definitely lead to improved buyer sentiment that would likely bring buoyancy in the overall demand across all segments. Going forward, we expect our wider product portfolio will drive growth.”
Data showed that the growth in May, like April, was supported by utility vehicles, especially compact ones such as Creta, Brezza and TUV300.
Renault continued its good performance on the back of Kwid sales. Toyota sales grew six per cent in May, registering its first growth after nine months of decline. The growth was helped by the launch of new Innova Crysta last month. Ford managed to grow sales by 22 per cent on the strength of new models that were launched last year.
Abdul Majeed, partner at Pricewaterhouse, said new launches would drive the growth in the passenger car segment. However, the sudden shift from diesel to petrol vehicles will put a lot of pressure on supply chain ecosystem. Srivastava said if fuel prices remained at these high points, it would add to the cost of ownership and create challenges.