Car sales end year with a sputter

Seven manufacturers together post a 15% decline M&M, Ford and Honda buck trend

Tepid sales, despite record discounts and introduction of new models, continued to remain a concern for most manufacturers in the domestic automobile industry with seven of the country’s major manufacturers (who released wholesale figures today) together posting a decline of around 15% to sell 93,540 units last month.

Industry growth was dragged down by Hyundai Motor India Limited (HMIL), Tata Motors, General Motors and Toyota Kirloskar – all of which reported double-digit dip in sales numbers last month.

Tata Motors sold only 14,185 units in December – a decline of a whopping 51% over 28916 units sold in the same month last year. The company reported combined sales of 11,257 units for the Nano, Indica and Indigo series. Sales of utility vehicles added another 2928 units.

Tata Motors said in a statement that the company has received good response for newly launched Manza Club Class sedan and the new Safari Storme. But due to increasing demand, the Safari Storme has been released only in the NCR region, Punjab, Uttar Pradesh, Rajasthan, Madhya Pradesh, Chhattisgarh, Maharashtra and Goa, and is being expanded in phases.

At Hyundai Motor India Limited too sales declined by 9.6% with to 26,697 units in the domestic market last month. US-based car maker General Motors, in the meantime, volumes dipped by 22% to 7067 units. The drop in sales at GM has come despite the company recently introducing new car Sail U-VA and upgrades of Spark, Cruze and Captiva. "Despite offering various schemes on purchase of every car, market continues to remain depressed…. If the current macro economic uncertainties continue, the market is not expected to turn around in the short term. The only hope now is on a good union budget…", informed P Balendran, vice-president (corporate affairs), General Motors India.

At Toyota Kirloskar Motor (TKM) too sales dropped by 24% to 12,071 units in December as compared to 15,948 units in the corresponding month in 2011. . Sandeep Singh, deputy managing director and chief operating officer, (marketing and commercial) said , “The passenger car market continues to be slow, as has been in the last few months .We hope the new year will usher in good times again with economic revival and better market sentiments. “

Homegrown automaker Mahindra & Mahindra (M&M), however, managed to buck the trend on the back of demand for diesel-powered utility vehicles such as Bolero, Quanto and XUV500. Mahindra sold 22,761 units during December, which is an increase of 18% over the 19341 units sold in the same month in 2011.

Pravin Shah, chief executive officer (automotive division), M&M, while expressing satisfaction over the sales momentum at Mahindra cautioned, “High interest rates, rising fuel prices and an overall slowdown in economic growth has kept consumer sentiment low during 2012. This is also evident in the auto industry sales performance for December, which traditionally has been a lean month. We do hope that corrective measures are announced and implemented soon bringing in the much needed buoyancy and growth for the industry.”

The other two companies which managed to post some increase in sales are Ford India and Honda Cars. While sales went up by nine% to 6517 units in December due to aggressive marketing campaigns, Honda saw a sales push due to demand for Brio. Honda sold 4242 units during December, over half of which came from demand for the small car. The two companies, however, has small share in the overall passenger vehicle industry at present.

In the two-wheeler industry too, consumer sentiments continued to remain weak. Sales at Hero MotoCorp, the country’s largest motorcycle maker, remained almost unchanged at 541,615 autos in December, compared with 540,276 a year earlier TVS Motor posted a decline of 9.6% in December sales from a year earlier to 151,735 units.

Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp said, “December - being the last month of the calendar year – usually witnesses sluggish retails as customers tend to postpone their purchases to the new year. Despite that, we have been able to despatch over five lakh two-wheelers during the month. We also have comprehensive marketing and customer engagement plans lined up for the remaining months of the fiscal to maintain this trajectory.”

BLUES CRUISE
Cars*
Company	December 2011	December 2012	% change
Hyundai Motor	29,516	26,697	-9.6
Tata Motors	28,916	14,185	-50.9
Mahindra & Mahindra	19,341	22,761	18.0
Toyota Kirloskar	15,948	12,071	-24.0
General Motors	9,039	7,067	-21.8
Ford India	5,978	6,517	9.0
Honda Cars India	1,072	4,242	296.0
TOTAL	109,810	93,540	-14.8
Two-wheelers*
Hero MotoCorp	540,276	541,615	0.25
TVS Motor company	167,905	151,735	-9.6
TOTAL	708,181	693,350	-2.1
*Domestic sales only for passenger vehicles *Overall sales for two-wheelers                                   Source : Industry