Passenger vehicle sales in the domestic market continued to show a downtrend, with 10 of the 19 major automobile manufacturers recording a decline of around eight per cent in sales last month at 178,442 units, as compared to the 193,371 vehicles sold during the corresponding period last year.
This is the second time this year that passenger vehicle sales have fallen amid negative consumer sentiments, spurred by hikes in lending rates and increased fuel prices. Data available with the Society of Indian Automobile Manufacturers shows passenger vehicle sales last month registered the sharpest drop in over three years, falling by 8.95 per cent to 183,657 units.
Abdul Majeed, leader, automotive practice, PricewaterhouseCoopers, says liquidity concerns persist. “Banks are not willing to lend, interest rates are high and there are fears they may go up further. Latent demand is there, consumers are postponing purchases,” he notes. “With new launches around the festive season, the market may revive. But growth is will be in single digits this fiscal.”
Industry sales numbers were dragged down with three leading manufacturers — Maruti Suzuki India Limited (MSIL), Hyundai Motor India Limited (HMIL) and Tata Motors. They posted a drop of 16.8 per cent, 6.7 per cent and 33.3 per cent respectively.
MSIL, which accounts for around 40 per cent passenger vehicles sold in the domestic market, recorded a 16.8 per cent decline in sales at 77,086 units. The Delhi-based company had sold 92,674 cars in August last year. Its bread-and-butter small-car segment posted a whopping 21 per cent decline in volumes, with sales of Alto, M800, WagonR, Swift, Ritz, A-Star and Estilo sliding to 53,539 units.
MSIL said the disruption in production at its Manesar plant last month-end adversely impacted its August sales. “The Swift, SX4 and A-star are being manufactured at the Manesar plant,” it said in a statement.
HMIL registered 6.7 per cent decline in domestic sales at 26,677 units. Arvind Saxena, director (marketing and sales), HMIL, says the market continues to be tough and he sees no immediate signs of recovery. “The rising fuel prices and interest rates have been instrumental in this sluggish market trend.”
Interestingly, both for MSIL and HMIL exports showed an uptrend. While exports grew by 18.5 per cent for Maruti at 14,356 units, the country’s largest exporter of passenger cars Hyundai too posted 10.5 per cent increase in overseas sales at 24,353 units.
For Tata Motors, which had stalled production for two weeks in August on account of maintenance and “rationalise and align inventory”, sales dipped by a third to 16,829 units. Wholesale volumes dropped across the Indica and Indigo range. Small car Nano recorded a decline of 85 per cent in sales at 1,202 units — the lowest since November 2010 when the company has sold a mere 509 units.
Smaller manufacturers like General Motors and Toyota Kirloskar Motor (TKM) posted strong growth numbers on back of new launches. Of the 9,050 units GM sold, 50 per cent of the volumes came in from the Beat, a diesel version of which was introduced in late June this year. The Etios and the Liva accounted for 47 per cent of sales for TKM. Honda Siel, too, grew volumes by 25 per cent, driven by sales of the sedan City which had a price cut of up to Rs 66,000 recently. City sales stood at 5,819 units in August.
