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The Indian auto industry continued to be buffeted with bad news ahead of the commencement of the international auto show on Wednesday next week. A day after best-selling India-made hatchbacks such as Maruti Suzuki Alto 800, Hyundai i10, Tata Nano failed to pass the Global New Car Assessment Programme (GNcap) on consumer oriented vehicle safety initiatives, sales data released by leading auto companies showed a drop of around five per cent in industry volumes in January as compared to the same period last year.
Factors like high fuel prices, expensive finance costs, tighter lending norms among other impacted demand. Seven of the country’s key automobile manufacturers together sold 194,070 passenger vehicles last month, which is a decline of 4.8 per cent as compared to 203,934 units sold in Jan 2013.
Volumes in the industry were dragged down with heavyweights like Maruti Suzuki (MSIL), Hyundai Motor India, Mahindra & Mahindra (M&M) and Tata Motors all reporting a decline in sales number.
Maruti Suzuki sold 96,569 units last month, which is a decrease of 6.3 per cent as compared to 103,026 units sold in the same month the previous year. While sales of entry-level models M800, Alto, WagonR, A-Star and WagonR went down by 17 per cent to 38,565 units, demand in the utility vehicle segment too took a hit of 21.9 per cent (at 4763 units). Sales of DZire offered some respite to the company growing by 12.7 per cent to 19,232 units.
The Korean auto major Hyundai too faced the onslaught of a sluggish market with domestic sales falling by 2.6 per cent to 33.405 units
The tapering demand for diesel-powered models took its toll on M&M, Tata Motors and Toyota Kirloskar, which have a strong portfolio of diesel products. Sales for utility vehicle maker Mahindra & Mahindra (M&M) dropped by 25.5 per cent to 19,792 units. Tata Motors continued its downward slide with monthly volumes dipping by 27.8 per cent to 10,974 units. At Toyota, sales declined by around 18 per cent to 10,910 units.
“The first month of 2014 did not witness any improvement in the overall industry performance and the situation remains subdued. The recent repo rate hike will in coming months escalate the rate of interest on car loans impacting consumer sentiment. We hope the upcoming Auto Expo which will showcase new products and technology, will provide a trigger in giving a much needed boost to the auto industry and overall sentiment”, said Pravin Shah, chief executive officer (automotive division), M&M.
N Raja, senior vice – president (sales and marketing), Toyota Kirloskar Motor concurred , “The market continues to be sluggish and the market sentiments remain low. The Auto Expo is expected to bring about excitement and will help improve customer sentiments."
Interestingly, car makers such as Honda and Ford, who have launched new products Amaze, new City and EcoSport, bucked the trend and continued to see good traction. While sales for Honda Cars India (HCIL) nearly trebled to 15,714 units, those of Ford went up by 10.6 per cent to 6706 units. In fact, for Honda, Amaze and City contributed 93 per cent to the company’s monthly sales volumes. “We have started the year on a positive note. We have received an overwhelming response to all new Honda City and the Honda Amaze continues to do strong sales.”, said Jnaneswar Sen, senior vice-president (marketing & sales), HCIL. In fact, Honda recorded its highest ever monthly sales in January.
