Discounts, apprehensions over impending price rise push sales.
Deeper discounts and apprehensions over impending price rises pushed up passenger car sales last December, with 10 of the country’s leading passenger vehicle manufacturers together registering a growth of 7.25 per cent to sell 189,383 units during the month.
An industry official said, “Car companies were offering discounts to increase off-take of petrol vehicles, which had slowed down due to the incessant hikes in price of the fuel. This, coupled with anxiety over increase in prices of cars from January, boosted sales.” Toyota, General Motors, Mahindra, Hyundai had all announced price rise with effect from January to offset higher input costs.
Apart from Maruti Suzuki India (MSIL) and Honda Siel Cars India, which continued to report poor sales, all other car makers managed to grow sales number in the domestic market last month.(Click here for AUTO SALES: LIMPING BACK)
Market leader MSIL recorded a 13.4 per cent decline in sales in December at 77,475 units. This is the seventh consecutive month (since the labour unrest at the unit in Manesar last June) that the company has registered a drop in sales. Repeated disruptions in production and slowing sales has, in fact, meant that Maruti Suzuki’s market share has fallen to 40 per cent from 45 per cent registered in the last financial year.
Compatriot Honda took a hit due to shortage in supply of components due to the floods in Thailand in October. Sales in the domestic market dropped by 80 per cent to 1,072 units last month compared to 5,135 units sold in the corresponding period in 2010.
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Companies, which have a strong portfolio of diesel vehicles such as Tata Motors and Mahindra & Mahindra, on the other hand, fared well. While sales picked up a robust 47 per cent for Tata Motors at 28,916 units, M&M grew by 24 per cent to 19,341 units. Mahindra sells utility vehicles Bolero, Xylo, Scorpio – all are available in diesel fuel options.
According to industry estimates, diesel vehicles sales increased by 22 per cent, while those of petrol vehicles dropped 14 per cent between April and November last year.
But volatile market conditions have meant that even though the country’s second largest car maker Hyundai Motor India posted a 13 per cent increase in sales, the company is exercising caution. Arvind Saxena, director (marketing and sales), said, "An increase of 12.8 per cent in sales in December gives us cause for some cheer in a year that has been below expectations. We don't expect an upturn in the market in the future." Hyundai sold 29,516 units in December.
Reiterating the sentiment P Balendran, vice-president, General Motors (GM) India, said, “We have been able to sustain the growth, primarily due to the encouraging response to Chevrolet Beat. We expect the market to remain tight for, at least, a couple of months.”
GM recorded 53 per cent of its overall sales last month from small car the Beat. The company had launched diesel variant of the small car in June and has been registering 80 per cent of demand for the model from the fuel option since then.
Reuters reported that shares in auto makers Tata Motors and Maruti Suzuki rose 2.9 per cent and 2.2 per cent, respectively, as the market responded to their strong showing in December sales, against a choppy BSE (Bombay Stock Exchange) Sensex that rose 0.4 per cent. However, two- and three-wheeler maker Bajaj Auto fell 7.3 per cent, after it reported a lower-than-expected rise in December sales, raising worries about its sales growth outlook for the current financial year.