Car makers see fading hopes of turnaround

March sales slump for most, Maruti, M&M buck trend.

After raising hopes of a turnaround with a healthy 21 per cent growth in February, car makers, with the exception of Maruti and Mahindra & Mahindra (M&M), saw sales slide in March, dashing hopes of a turnaround in this bellwether industry.

Maruti Suzuki, the country’s largest car maker, continued its three-month dream run by notching up a 15 per cent jump in domestic sales in March. Maruti’s March sales follow a 19 per cent growth in February, when it sold a record 70,625 cars — the highest ever by the company. In March 2008, the car maker sold over 64,000 cars.
 

BUMPY TRACK (March sales growth in %)
Maruti	+15
Hyundai	-15.8
Tata Motors	-4
Honda Siel	-17
M&M	+30

But R C Bhargava, chairman of Maruti Suzuki, is cautiously optimistic. “We have been seeing good sales growth over the past few months, but no one can predict what will happen in the following months. We expect to end 2008-9 with around 1.5 per cent higher sales over the previous financial year,” he told Business Standard.

Bhargava denies that bookings of Tata Motors’ Nano in April will have an adverse impact on its sales for the month.

Hyundai, the country’s second-largest car maker, was unable to maintain the sales momentum of a 45.3 per cent growth in February. March sales fell nearly 16 per cent to just 24,754 cars. “As we had stated last month, the industry is far from seeing a turnaround. If we look at the February and March sales combined and compare them to the same period in 2008, we have grown 4.5 per cent. Whereas March 2009 sales over February 2009 have grown 16.7 per cent,” said Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India Ltd.

Meanwhile, Tata Motors may be gung-ho after the launch of the Nano, the world’s cheapest car, but its sales fell 4 per cent, with the company selling 23,680 units in the domestic market . The company had fared much better in February, with sales growing 1.4 per cent

Unlike February, new models have not been able to halt falling sales for premium car maker Honda Siel. The company saw sales fall over 17 per cent in March, when it sold 7368 units. 

However the company claims it has grown 32 per cent over the previous month by selling7,368 units in March 2009 against 5,579 units in February.

“The new Honda City has emerged as an exemplary performer. Even in these challenging times, sales of the Honda City have grown by 20 per cent ever since the deliveries started in November 2009,” said Jnaneswar Sen, vice president - marketing, Honda Siel Cars India said.

Meanwhile, buoyed by the success of the Xylo, M&M saw its passenger utility vehicle sales grow 30 per cent growth over March 2008.  “Our sales this month have been bolstered by impressive numbers for all M&M products. Domestic utility vehicles have grown a solid 30 per cent on the back of the highest-ever sales for the Scorpio, Bolero and the Pik-Up. Not to mention the strong market sentiment that continues for the recently launched Xylo,” said Pawan Goenka, president, automotive sector, Mahindra & Mahindra Ltd.

However, sales of Mahindra Renault’s Logan for March  dipped 69 per cent to 962 units over the same month last year.