Growth accelerates for passenger car OEMs in February

The Indian passenger vehicle industry is headed for a record fiscal. From the first few sales numbers released by some leading carmakers for the month of February 2018, it is abundantly clear that growth is here for stay for the segment.

While the country’s leading carmaker Maruti Suzuki continued to reign in terms of sheer volumes, selling 136,648 units and growing 13.3 percent, home-grown Tata Motors saw demand rising for its latest UV offering – Nexon – along with the Tiago hatchback, leading the company to post robust growth of 45 percent.

Maruti Suzuki India
With sales of 136,648 units in the month, the company registered year-on-year growth of 13.3 percent (February 2017: 120,599) in the domestic market. Maruti Suzuki cumulatively sold 1,496,297 units between April-February 2018, growing 13.7 percent (April-February 2017: 1,315,946) and with its continued strong performance, the company is headed to set a sales record for itself and surpass the 1.5mn mark in the fiscal. Given the pace of sales, driven by new models like the Swift and Dzire as well as the game-changing Vitara Brezza, Maruti Suzuki clearly is going to achieve its best-ever sales for a fiscal year in FY2018. In FY2017, it had sold a total of 1,443,641 units (+10.59%).

In February 2018, while the entry-level Alto and Wagon R siblings registered nearly flat sales of 33,789 units (February 2017: 33,079 / +2.1%), the set of compact cars including the Swift, Ignis, Baleno and the DZire together went home to 65,213 buyers, posting significant growth of 38.7 percent (February 2017: 47,002). Interestingly, Maruti launched the third generation of the Swift hatchback at the Auto Expo at the start of February; given the pent-up demand among buyers for this model, it is already being seen in good numbers on the roads.

If there is a worry for the company, then it is in the dwindling numbers of the premium Ciaz sedan, which is facing the heat from the competition in the C-segment. The sedan, which is now being sold through the Nexa premium car sales channel, was able to garner sales of 4,897 units, declining by 16.8 percent (February 2017: 5,886). The new Hyundai Verna and the Honda City are giving it a tough time, and the fight is only set to become fiercer once Toyota introduces its Yaris sedan in the country in May 2018.

UVs are a growing breed and Maruti's UV portfolio, which includes the Gypsy, S-Cross, Ertiga, and the Vitara Brezza, is making the most of the trend. The pack of crossovers cumulatively sold 20,324 units, growing a considerable 13.8 percent (February 2017: 17,863). The company also showcased its Concept Future S at the Auto Expo, which screams SUV styling with compact proportions.

The two vans Omni and Eeco, on the other hand, sold 12,425 units, declining 12.5 percent (February 2017: 14,195). 

Hyundai Motor India
The second largest carmaker in the country by sales volumes, Hyundai Motor India sold 44,505 units in February, registering growth of  5.1 percent (February 2017: 42,327).

The company is marching forward on the back of sizeable demand for its Grand i10, Elite i20, and the Creta SUV, which have continued to put out good performance in their respective segments. The three models are regulars in the Top 10 PVs and UVs charts, with the Grand i10 selling 12,109 units and the Elite i20 going home to 9,650 buyers in January. The company also introduced the facelifted Elite i20 at the Auto Expo and apart from getting some aesthetic updates; the hatchback has also received a new 1.2-litre petrol-CVT combination to enhance its convenience quotient.

According to Rakesh Srivastava, director, Sales and Marketing, Hyundai Motor India, "Hyundai grew by 5.1 percent with a volume of 44,505 units on strong performance of the newly launched modern premium brands the new 2018 Elite i20, Next-Gen Verna, along with the Creta SUV in a growing market on the strength of stable interest rates and fuel prices in a faster growing economy."

Tata Motors
Tata Motors has been slowly upping its game in the Indian PV segment and its efforts are quite evident in the robust sales numbers posted by the company. It sold a total of 17,771 units last month, posting a substantial 45 percent growth (February 2017: 12,272). Over the 11-month period between April-February 2018, the sales numbers stand at 184,979 units, registering notable 20.33 percent (April-February 2017: 153,726) growth.

The company has been witnessing good demand for its newest offering, the Nexon compact crossover, which was launched in September 2017 and has gone on to keep the assembly lines at Tata Motors’ Ranjangaon plant buzzing, with over 25,000 units getting built within five months of its launch. The Nexon and the Hexa SUV have together gone on to make the company’s UV sales surge by 165 percent in the month, while the Tiago hatchback continues to remain strong with its solid value proposition, bringing in 17 percent growth to Tata’s passenger car sales, with its compact sedan sibling - Tata Tigor also picking up speed. With 167,208 units getting sold between April-January 2018, the company has seen its PV market share increasing from 5.64 percent to 6.17 percent.

Tata Motors could also be considered to be the show stealer at the 2018 Auto Expo with its H5X SUV and the 45X premium hatchback concepts. The company will introduce the production version models of these concepts in 2019, which will aid its goal of becoming the No 3 car manufacturer in the country by 2020.

Mahindra & Mahindra
UV major Mahindra & Mahindra (M&M) also announced its sales numbers and the company sold 22,389 PVs in February, registering growth of 8 percent (February 2017: 20,717). While sales of its UVs, which include popular models like the Bolero, Scorpio and the XUV500 grew by 7 percent with 20,977 units (February 2017: 19,529), its passenger cars and vans grew by a considerable 19 percent, albeit contributing very low volumes of 1,412 units (February 2017: 1,188).

Commenting on the monthly performance, Rajan Wadhera, president, Automotive Sector, M&M, said, “We are happy with our February performance with the business having registered a growth of 19 percent. This performance comes on the back of a sustained momentum and demand, both in the personal and commercial vehicle segments, which we believe will also continue in the month of March.”

Toyota Kirloskar Motor
Toyota Kirloskar Motor (TKM) has reported total sales of 12,705 units for February. This comprises 11,864 units in the domestic market (+2.78%) and exports of 841 units of the Etios series (+47.5%). TKM sold a total of 11,543 units in the domestic market and exported 570 units of the Etios series in February 2017.

Commenting on the sales performance, N Raja, deputy managing director, TKM, said, “We are happy that we have been able to sustain the positive growth trend registering a 3 percent growth in February. We have started the year 2018 on a positive note with a cumulative growth of 11 percent in the first two months of January-February 2018."

“Toyota unveiled its Yaris sedan with 12 first-in-segment features at Auto Expo recently. It is a pleasure to see the positive attention and interest it has generated already amongst Indian customers. With the launch of the product in May 2018, we hope to boost our sales momentum. We will further strengthen focus on our segment- leading products Fortuner, Innova Crysta and Corolla with better operational efficiency."

"The National Auto Policy Draft has been very encouraging with a clear focus and push towards ‘technology agnostic’ green mobility roadmap. We are optimistic that such measures to promote cleaner and greener technologies will further promote hybrid technology and rationalise the GST structure for automobiles,” concluded Raja.

Honda Cars India Honda Cars India registered monthly domestic sales of 11,650 units in February 2018, down 18.23 percent YoY. The City sedan was the best-seller with 3,885 units, followed by the WR-V crossover (3,364), Jazz (2,257), Amaze (933), BR-V (822), Brio (375) and CR-V (14).

Commenting on the sales, Yoichiro Ueno, president and CEO, Honda Cars India, said, “Honda Cars India has witnessed strong sales momentum with the existing product line-up marking a cumulative growth of over 13 percent and we are confident of closing the financial year on a positive note. We showcased our upcoming models at the recently concluded Auto Expo 2018 which has created a significant buzz in the market. The planned reduction in volumes of the current Amaze resulted in lower wholesales in February.”

Ford India
The American carmaker, which has been seeing slow sales for quite some time, registered sales of 9,041 units and grew by 8.4 percent (February 2017: 8,338). The uptick in numbers could be credited to the facelifted EcoSport, which was launched in November 2017 and sold 6,833 units in January, contributing majorly to the company’s sales.  

According to Anurag mehrotra, president and managing director, Ford India, “Improvements in GDP growth and other industry indicators continue to support the year-on-year growth of the auto industry. However, there are headwinds in terms of impending increase in interest rates, crude prices, and inflation. We also believe the increase in customs duty and the cess of exports will drive up prices, with a potential of impacting demand.”

Also read: Commercial vehicle OEMs record robust growth in February