Festival spark in sales slowdown

The festival season seems to have brought some respite to car makers, with the country’s 10 leading manufacturers together posting 0.93 per cent decline, selling 203,678 units last month as compared to 205,591 units sold during the corresponding period last year.

The numbers are significant as they could signal a revival in motown which has reported sharp drop in sales in the last two months burdened by rising interest rates and increasing fuel prices. After posting scorching growth rates of around 30 per cent in the last financial year, passenger vehicles sales declined by nine per cent, and subsequently, by six per cent in July and August this year.

The total sales numbers would have improved had it not been for the over-one-month labour trouble in Maruti Suzuki’s Manesar plant which has impacted its normal sales. The company on an average sells over 90,000 cars in the domestic market every month when not disrupted by labour agitations. In September it sold much less — 78,816 cars, a fall of 17.2 per cent over last year — dragging the overall car sales numbers of the industry, even while manufacturers such as Hyundai Motor India Limited (HMIL), Tata Motors, Mahindra & Mahindra, General Motors and Toyota Kirloskar revved up volumes.
 

AUTO SALES CHART                         (DOMESTIC)
Company	Sept 2010	Sept 2011	%chg
Maruti Suzuki	95,148	78,816	-17.2
Hyundai Motor	31,756	35,955	13.2
Tata Motors	23,877	26,319	10.0
M&M	17,537	19,447	11.0
Fiat	1,650	818	-50.4
Toyota	6,235	12,807	105.0
Ford	8,380	7,801	-6.9
General Motors	8,617	10,112	17.4
Volkswagen	4,663	6,845	39.0
Honda Siel	7,728	4,758	-38.4
Total	205,591	203,678	-0.9

Maruti constitutes for over 40 per cent of the car sales in India.

The country’s second-largest manufacturer, HMIL, reported its highest ever sales since its inception, at 57,808 units.

While volumes in the domestic market grew by a robust 13.2 per cent to 35,955 units, exports were up 11 per cent to 21,853 units. Arvind Saxena, director (marketing and sales), HMIL, said: “We will launch our much awaited compact car Eon this month. In spite of a sluggish market we expect Eon to boost sales and increase market share.”

Tata Motors too scaled up sales in the domestic market by 10 per cent to 26,319 units. Though sales fell 47 per cent to 2,936 units for Nano, volumes for the company came from the Indica range and from utility vehicle sales.

MSIL, meanwhile, reported a decline of 17.2 per cent, selling 78,816 units last month. Exports too remained a sore spot for the company dipping by a whopping 47.5 per cent to 6,749 units. The company exports hatchback A-Star to markets in Europe.

“The disruption in production owing to labour issues at the company’s Manesar plant during September adversely impacted the sales numbers during the month. Swift, SX4 and A-star are manufactured at the Manesar plant,” MSIL said in a statement.

Abdul Majeed, leader, automotive practice, PwC, said: “Sales may grow by five-six per cent next month because of the festival season. But the approach among auto makers remains cautious. Liquidity continues to be an issue, interest rates are high. But there are some positive signs. Global commodity prices have come down. Car makers can now pass on the benefits of lower inputs costs to customers to spruce up sales.”

General Motors also reported a robust growth in sales of around 17 per cent in September on the back of the Chevrolet Beat diesel car. “The growth was primarily driven by the recently launched vehicle, Chevrolet Beat Diesel. But the market continues to be sluggish due to repeated hike in interest rates and rising fuel prices, which is creating tremendous pressure in the automobile market,” concurred P Balendran, vice-president, GM India. Of the 10,112 units GM sold last month, over 50 per cent was of Beat, a diesel version of which was introduced late June this year.

New launches Etios and Liva accounted for 46 per cent of sales for Toyota.