In the slow lane: June auto sales growth flat

This, despite Maruti Suzuki, Hyundai and Tata Motors posting growth; pressure on volumes looked immense during the month

The growth in sale of passenger vehicles is moderating after a speedy start in April and May. June volume growth has been the lowest in the current financial year though Maruti Suzuki, Hyundai and Tata Motors continue to grow.

Based on data from six companies, sale of passenger vehicles (cars, utility vehicle and vans) is estimated to have grown by 2.4 per cent in June, against an industry growth of 15.8 per cent and 4.7 per cent in April and May, respectively. General Motors chose not to declare June number. It has been seeing a sharp decline in domestic sales for a while.

Maruti Suzuki, the country’s largest player, reported a marginal growth of 1.6 per cent in domestic sales in June. Volume has been affected by a decline of 28 per cent in the entry level cars (Alto, WagonR).

This is the lowest and the first single-digit growth seen by the company in the first three months of the current financial year.  

The company had reported domestic sales growth of 27 per cent in April and 13 per cent in May. An analyst said the low growth for Maruti is on account of a high base in June last year.

Hyundai Motor, the second-largest player, saw a growth of over eight per cent in June sales. Rakesh Srivastava, senior vice-president (sales and marketing), said, “In a market bearing low traction, consistent demand for models like the

Elite i20, Grand and  Xcent helped Hyundai to grow by eight per cent. We are confident of sustained growth with the upcoming launch of our SUV Creta.”

Tata Motors continues to grow volumes steeply, like last month. Its domestic passenger vehicle sales grew 30 per cent, driven by sales of the Zest and the GenX Nano, which was launched in May.

Mayank Pareek, president, passenger vehicles business unit at Tata Motors, said while the company has done well, there is concern as far as industry sales are concerned on industry sales.

“A stress in buyer’s sentiment was created by news of a deficit monsoon last month and expectations of a rate cut. I expect the industry volume to start improving once the festive season starts around October,” he said.

Mahindra & Mahindra (M&M) continues to see pressure on volumes like May. Its volumes dropped by 15 per cent in June, pulled down by slowing demand for utility vehicles where it is the market leader. The company is hopeful of a pick up in demand.  Pravin Shah, president and chief executive (automotive), M&M, said, “With a normal monsoon till date, an overall positive sentiment and a slew of new launches in the automotive industry, we expect buoyancy in demand.”

Volkswagen has reported a 31 per cent increase in June sales. June volume stood at 4,039 units.

Toyota Kirloskar, which reported a 13 per cent decline in sales, said the volume has been impacted due to a maintenance shutdown for six days in June. Another Japanese car maker, Honda, saw volumes pick up  12 per cent.

Ford India reported a 33 per cent decline in total sales at 7,979 units in June. It had sold 11,935 units in June 2014.