Maruti, M&M, Renault buck the trend in sluggish auto sales

High interest rates and fuel prices wipe out October's festive season gains

Low consumer sentiments flagged off by high interest rates and fuel prices wiped out festive gains with eight of the country’s leading automobile manufacturers on Saturday reporting a modest growth of 3.7 per cent in sales at 194,882 units in November.

Industry growth was led by Maruti Suzuki (MSIL), Renault and Mahindra & Mahindra (M&M) who managed to buck the trend and posted an increase in volumes on demand for diesel-driven models such as the DZire, Ertiga, Duster and Quanto. While sales went up by a strong 38 per cent for M&M to 24,604 units, volumes at Maruti Suzuki increased by around 9.7 per cent to 90,882 units.

Demand, however, continued to remain weak in MSIL’s bread-and-butter small car segment. Sales of models such as the M800, Alto, A-Star and WagonR declined by around six per cent to 36,679 units last month indicating persisting sluggishness in sales of petrol-powered cars. The fall in sales has come despite the company introducing an upgraded version of best-seller Alto in mid-October this year.

The adverse market conditions reflected more sharply in sales offtake reported by Tata Motors. The company reported a decline of a whopping 54 per cent selling 18,031 units during November. Volumes decreased across product lines. While sales of Tata Nano decreased by 45 per cent to 3503 units, demand for the Indica and Indigo ranges of cars fell by 36 per cent to 6,956 units and 40 per cent to 3,709 units, respectively.

Commenting on the November sales, Rakesh Srivastava, vice president (marketing and sales), Hyundai Motor india Limited (HMIL), said, “The adverse market conditions due to high interest rates and inflation continued to pose challenges for growth.” Sales for HMIL dipped by 0.7 per cent to 34,751 units in the domestic market.

At Toyota Kirloskar too, volumes dropped by 26 per cent to 10,352 units in November because of a production shutdown at its two plants last month. One plant was shut down for a week and the other was shut for 15 days. Sandeep Singh, deputy managing director (marketing), Toyota Kirloskar Motor, offered some hope for the industry, “We hope to see growth next month due to year-end sales. The market is expected to grow in the first quarter of next year.”