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The country’s largest automobile and two-wheeler manufacturers Maruti Suzuki India Limited (MSIL) and Hero MotoCorp (HMCL) posted better than expected sales numbers in September, raising hopes of a turnaround in the industry with the arrival of the festive season.
Though combined sales in the industry fell by 2.6% to 192,852 units on back of poor show by Tata Motors and Mahindra & Mahindra (M&M), automakers are cautiously hopeful of a revival around the festive season.
While sales for the small car giant Maruti Suzuki in the domestic market went up by 1.8% to 90,399 units last month, exports surged by a whopping 180% to 14,565 units.
The strong rebound in shipments overseas raised the total sales tally for the company, which went up by 11.7% to 104,964 units. Interestingly, sales for the company grew by 14.5% in the passenger car segment (cars and sedans) in the domestic market, but tepid demand in the utility vehicle segment (Gypsy, Ertiga) dragged down growth to a modest 1.8%. Overall, the market responded positively to the development with shares of Maruti Suzuki closing at Rs 1380, up by 1.62% on the Bombay Stock Exchange (BSE).
Sales of two-wheelers too went up for the second consecutive month hinting at an improvement in consumer sentiments in the rural market. While wholesale numbers for Hero MotoCorp increased by 15.8% to 468,670 units in September 2013, rival Honda Motorcycle and Scooter India (HMSI) saw record offtake of328,965 units – a growth of 35%.
Anil Dua, senior vice president (marketing & sales), HMCL said, “Our 16% growth in despatch sales in September has come on the back of a consistent seven% growth in our retails this year. This has been helped by strong performance of our models and our customer–friendly corporate initiatives such as the five-year warranty across our range and ‘Hero Mileage’ – the promise of extra kilometers per litre. With a slew of new offerings that we have planned, we enter the festive season with optimism and confidence.”
General elections, favourable monsoon and a healthy rural demand may provide automobile companies the much needed reversal in sustained demand free fall witnessed in the past several months, say industry insiders.
"The monsoon was normal, the rural economy continues to be buoyant, with those sentiments better, surely we expect the rural demand to grow. With right policies from the government and also from the fact that the rupee depreciation has stopped, we expect some momentum to come back. These factors impact the sentiments and that's what is makes us believe that the worst is behind us", said Pravin Shah, chief executive (automotive division), M&M. Mahindra registered a decline of 20.5% in domestic sales last month. Tata Motors continued its downslide with volumes slipping by over 40% to 12,879 units.
Korean auto major Hyundai (HMIL) too, which recorded a marginal dip in of 0.8% selling 30,601 units, is cautiously optimistic. “We expect the market challenges to continue and have a cautious optimism for upcoming festive season”, said Rakesh Srivastava, senior vice-presdient (sales & marketing), HMIL. For Toyota Kirloskar Motor (TKM) too (which has seen sales slide by 27% till August this fiscal), the decline moderated to 0.8%. TKM sold 12,015 units in September as compared to 12,115 units sold in the same period last year.
Car makers such as Honda AND Ford, which has launched new products Amaze and EcoSport recently, continued to see good traction. While sales for Honda Cars India grew by 88% to 10,354 units, that of Ford went up by 36.5% to 10,640 units. “Honda Cars has outperformed despite a consistent slump in the demand of passenger cars over the past eight months. We are happy to see the huge demand for the Honda Amaze and Brio. The sales figures have set a positive tone for the upcoming festive season”, said JnaneswarSen, senior vice president (marketing & sales), Honda Cars India.
