Maruti sales at record high as cars buck usual dip

Consumers grabbing new models; companies report very high sales, in reversal of usual pre-monsoon dampener.

New models and overall revival in demand have helped car manufacturers to buck the trend of low sales in the first quarter (April-June).

Recently, three new models were introduced in the compact car category, the largest selling segment in India. This includes the Chevrolet Beat, Ford Figo and Volkswagen Polo and the new WagonR.

In fact, the demand is so robust, both from urban and rural India, that Maruti Suzuki India registered its highest ever domestic sales last month, at 90,041 units as against 70,785 units in May last year, growth of 27.2 per cent. The earlier record for highest ever monthly sale was this February, at 84,765 units. Even Ford numbers are a record high, with the company posting a 272 per cent jump in May at 8,080 units vis-à-vis 2,168 units in May 2009.

No dip this time
“We are trying to beat the usual cycle of low-selling months in the period following the Union budget and before the advent of the monsoon, with renewal of buying among the city people, as more and more companies are now on the hiring mode and therefore higher disposable incomes among urban customers,” said Mayank Pareek, executive officer (marketing and sales), Maruti.

Sales of Hyundai Motor India went up by 15.5 per cent at 27,151 units as compared to 23,503 units in the corresponding period, while Tata Motors registered a growth of 38.6 per cent at 21,326 units vis-à-vis 15,388 units. Utility vehicles as well as Logan car sales of Mahindra and Mahindra went up by 48.6 per cent, at 19,390 units as compared to 13,047 units in May last year.

Even sales of GM India surged by 60.9 per cent at 8,225 units last month, as compared to 5,109 units in May last year. Those of Toyota surged by 54.2 per cent at 6,060 units as compared to 3,924 units and Fiat India posted a jump of 84 per cent in May at 2,163 units vis-à-vis 1,175 units in the corresponding month last year. Honda Siel Cars India, however, saw a marginal decline of 0.12 per cent at 4,067 units, as compared to 4,073 units in May 2009.

According to Vaishali Jajoo, senior analyst, Angel Broking, April-June or the first quarter of any financial year is traditionally a lag period. However, this time sales have been good both in April and May on the back of recently launched models. The ‘excitement period’ for these models is still on.

For the majority, it is the A2 segment comprising Maruti’s Alto, WagonR, Estilo, Swift and Ritz, Hyundai’s Santro, i10 and i20, the Chevrolet Spark and Beat, among others that contributed the most to their sales. For instance, the A2 segment of Maruti witnessed a 16.6 per cent jump, its best ever for a month, at 62,679 units compared to 53,760 units in the same month a year ago.

“Although the market continues to grow, we were constrained by our planned annual maintenance shutdown (at the Chennai plants) this month, which restricted our numbers as we had to divert our export production to meet the demand for the domestic market,” said Arvind Saxena, director (sales and marketing) at Hyundai, adding that demand for the company's i20 model was growing by 35 per cent monthly.