Vehicle Sales Remain Sticky

Auto market across segments could not shake off the downbeat sentiment with uncertainty besetting the economy, unrelenting inflation, high fuel prices and firm interest rates continuing to haunt the market. 

Domestic passenger car sales continued to fall for the seventh month in a row, giving rise to worries that the current slowdown is going to last longer than one had expected. Domestic sales of passenger cars fell by 12.3% to 143,216 units in May against 163,222 units in the corresponding month last year. This is the longest stretch of declining car sales, the market has ever witnessed. Even during the worst global recession in the latter half of 2008-09, the Indian auto market scraped through more or less unscathed.

What is more worrisome is that the slowdown has become all-pervasive and all segments are going through a sluggish spell. 2-Wheelers and UVs, which were holding steady in spite of adverse conditions and slowdown blues, are also running out of gas, as the sales figures for the months of April and May indicate. UVs that had been clocking a healthy double-digit growth till as late as March and shoring up the PV sales numbers, recorded a modest 4.2% growth y-o-y in domestic sales to 42,330 units in May 2013.

Two-wheelers just managed to stay in positive territory with a paltry 1.1% increase in domestic sales at 1,206,173 units during May 2013, indicating that hinterland and rural areas, which have been the mainstay of two-wheeler sales and have sustained their growth, have also been bitten by the slowdown bug.

Mirroring the challenging environment faced by the economy, commercial vehicles were stuck in the negative terrain with domestic sales of CVs sliding by 10.6% y-o-y to 55,458 units during the month.

Domestic sales of 3-Wheelers were also in reverse gear, slipping by 3.5% y-o-y to 35,841 units in May 2013.

Total sales tally of vehicles in domestic market encompassing all categories declined by 1% to 1,498,909 units in May 2013, as compared with 1,512,986 units in the same month previous year. 

Car market leader, Maruti Suzuki India (MSI) reported a 13% decline in domestic sales to 77,821 units in May 2013 from to 89,478 units in May last year. While the company's sales of mini segment cars, including the M800, A-Star, Alto and WagonR rose by 5.1% to 31,427 units, its compact cars, including the popular Swift model, saw a decline of 29.4% in sales at 17,147 units during the month. Exports of MSI were in free-fall mode as well, plummeting by 27.1% y-o-y to 6,856 units.

Driving downhill, Toyota Kirloskar Motor saw its sales in Indian market plunge by 35.3% y-o-y to 10,023 units in May 2013. Commenting on sales, TKM Deputy Managing Director and COO (Marketing and Commercial), Sandeep Singh said: "The market continues to be sluggish. We have corrected the dealer's inventory levels and have been able to bring it down to less than 30 days."

Hyundai Motor India Ltd (HMIL)’s domestic sales stood at 32,102 units during the month, inching up by measly 0.3% from 32,010 units in May 2012. HMIL, however, recorded a 4.6% growth y-o-y in exports that numbered 24,754 units.

Rakesh Srivastava, Sr Vice President, Sales and Marketing, HMIL said, “Hyundai has been able to maintain positive growth and will gain in market share in a market that is at the near bottom level and is expected to move into positive growth in the coming months as the demand for the petrol cars is improving. The export volumes have increased and we continue to improve on our leadership position on account of strong demand from the non-European markets.”

Riding on its new offering – Amaze, Honda Cars India Ltd (HCIL) recorded its highest ever domestic monthly sales of 11,342 units in May 2013 as against 10,334 units in the corresponding month last year, registering a growth of 9.8%. HCIL also exported a total volume of 738 units during May 2013. 

The May’13 sales performance reflects an upward trend over the past few months attributed to the enormous consumer response to the newly launched Honda Amaze and the recently revamped Brio. 

Delighted at the company’s performance Jnaneswar Sen, Sr Vice President – Marketing & Sales, Honda Cars India Ltd said, “We have started the financial year on a good note and would look to build on this positive trend in our new phase of growth in the country. Our success can be attributed to our attractive product portfolio and Honda brand promise of technology, performance and efficiency. We expanded our operating universe with the new Honda Amaze, which continues to receive great response from the first time buyers and consumers looking for a family car.”

Domestic sales break-up of HCIL for May 2013: Brio – 2,012 units; Amaze – 6,036 units; City – 3,202 units; Accord – 24 units; and CRV - 68 units.

General Motors India (GMI) too had a good month, posting 39.8% increase in sales at 8,500 units in May 2013. "We were able to register the 40% growth only because of the good response to our newly launched vehicles - Chevrolet SAIL and Chevrolet Enjoy," GM India Vice-President P Balendran said.

Homegrown auto major -  Mahindra & Mahindra (M&M) that has registered robust growth for the past few years, is witnessing moderation in its UV sales lately. Its UV sales in domestic market rose by modest 3.3% y-o-y to 20,873 units in May 2013. 

Tata Motors could not stem the slide with its total passenger vehicle sales in the domestic market tumbling by massive 45.4% to 10,973 units in May 2013 from 20,115 units in the same month of 2012.

Commercial vehicle sales of Tata Motors were equally lacklustre, reflecting the downbeat sentiment facing economy. Domestic CV sales of Tata Motors were down 13.9% y-o-y to 34,457 units, with M&HCV sales diving by 18.7% y-o-y to 10,123 units in May 2013. The company’s domestic sales of LCVs too slipped into the negative terrain, registering a 11.7% fall during the month.

Driven by compact Sports Utility Vehicle – Duster, Renault India Private Ltd recorded a 13-fold rise in its sales during the month of May 2013 with a sales volume of 6,300 units against the sales figure of 482 units in the corresponding month last year. In the total of 6,300 units, the sales of Duster accounted for 5,146 units, whereas the figures of Scala sedan, Pulse hatchback, Fluence premium sedan and Koleos SUV stood at 670 units, 410 units, 71 units and 3 units, respectively.

Sumit Sawhney, Executive Director, Marketing and Sales of Renault India Private Ltd, said, “In spite of challenging market conditions, Renault continues to pursue a strong focus on growth in India, with an aim of at least doubling last year’s sales in 2013.”

Ford India's domestic sales in May 2013 crashed 33.7% to 4,002 units from 6,036 units a year earlier.

In the two-wheeler segment, Hero MotoCorp, arresting the sliding sales, clocked a paltry 1.6% growth in its domestic sales that stood at 547,593 units in May 2013 as against 538,988 units in May 2012.

With total sales volume of 229,163 units, Honda Motorcycle & Scooter India (HMSI)’s y-o-y growth slowed down to 3.5% in May 2013.

Bajaj Auto, selling 227,513 units of two-wheelers in Indian market, notched up a 2.6% growth y-o-y during the month.

Chennai-based TVS Motor saw a 7.8% fall in its domestic sales of two-wheelers to 140,056 units in May 2013 from 151,980 units a year ago.

India Yamaha registered a 30% uptick in its domestic sales at 34,021 units, compared to 26,287 units in the same month last year.

Uncertainty continues to grip the auto market with all segments reeling under slowdown. The depreciation of rupee is making things worse for the industry. The timely onset of Monsoon and its fairly good coverage so far provides a ray of hope for the embattled Indian economy and auto market.



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