Passenger vehicle sales maintain uptick in May 2017

Having sold 277,602 units and posted 14.50 percent year-on-year growth in April 2017, the Indian passenger vehicle (PV) industry seems on track to record consistent gains in the coming year. The first sales numbers for the month of May 2017 released today by a few manufacturers indicate good traction in the domestic market and the return of consumer sentiment.   

Maruti Suzuki India, the country’s largest carmaker, has reported total sales of 130,676 units in the domestic market. This marks 15.1 percent year-on-year growth (May 2016: 113,162). The entry level, bread-and-butter duo of the Alto and Wagon R sold 39,089 units, up 18.1 percent (May 2016: 33,105). The company’s six compact cars comprising the Swift, Ritz, Celerio, Ignis, Baleno and Dzire sold 51,234 units, up 10.1 percent (May 2016: 46,554). However, this is considerably lesser than the robust 39 percent growth of 63,584 units in April 2017. The Ciaz premium sedan, which is now sold only from the premium Nexa channel, went home to 4,724 buyers, down 8.9 percent (May 2016: 5,188). The two vans – Omni and Eeco – sold 12,593 units, up 3.5 percent (May 2016: 12,164).

The surging consumer demand for the Vitara Brezza refuses to slow down, as a result of which Maruti Suzuki posted a 66.3 percent YoY increase in sales of its UVs (Gypsy, Ertiga, S-Cross, Vitara Brezza) to 22,608 units (May 2016: 13,596). And, Maruti’s Super Carry, its entry model into the LCV segment, sold a total of 428 units in May 2017.

Hyundai Motor India registered domestic sales of 42,007 units, slightly better at 1.6 percent than the 41,351 units sold in May 2016.  

Commenting on the sales numbers, Rakesh Srivastava, director, Sales and Marketing, said, “Hyundai volumes at 42,007 units maintain the growth momentum in passenger vehicles on the strength of the demand pull created by the Grand i10, Elite i20, Creta and the newly launched new Xcent.”

Homegrown UV major, Mahindra & Mahindra sold 20,290 units in May 2017, registering marginal growth of 3 percent (May 2016: 19,635). UVs, typically, are the prime contributors to the sales of 19,331 units, up 4 percent YoY (May 2016: 18,648). With the Indian Meteorological Department predicted a near-normal monsoon for FY2018, demand for workhorses like the Bolero in the hinterlands can only be expected to further rise in the coming months.

Honda Cars India sold 11,278 units (+13.3%) in the domestic market (May 2016: 9,954). The main driver continues to be the Honda City sedan, which has again been on a roll, after introduction of its facelift, in January 2017. The car went home to 4,046 buyers, followed by the recently launched WR-V crossover, which saw 2,814 units being driven away from showrooms. Waiting period for the WR-V have risen to up to 3 months in some cities.

Yoichiro Ueno, president and CEO, Honda Cars India, said: “We are happy to have achieved positive growth in May. We continue to receive strong demand for the new City and the WR-V. The government’s plan for timely rollout of GST and a better monsoon forecast will aid in sales growth in the coming months.”

Toyota Kirloskar Motor closed the month of May 2017 with sales of 10,914 units, down 13.48 percent (May 2016: 12,614). The company is witnessing strong pull in the UV space from its Innova Crysta MPV. One of the factors for this slowdown in the premium SUV and UV space could be attributed to the foreseeable significant tax cut, to the tune of 7 percent, which is expected soon due to the implementation of GST tax reforms from July 1. According to Toyota, this has been holding customers back from making an impromptu purchase just ahead of the upcoming deadline.

Commenting on the monthly sales, N Raja, director and senior vice-president, Sales & Marketing, Toyota Kirloskar Motor, said, “The Innova Touring Sport, launched in May, has been appreciated by customers for being the first mover in the MPV segment with an SUV styling.  With the ambiguity surrounding the upcoming GST proposed tax structure, customers are postponing their plan of purchasing the vehicle after the GST implementation. We expect this impact to magnify in June 2017 until the customers have a clear understanding of the final pricing after the GST rollout.”

Tata Motors saw an uptick of 27 percent in the month of May 2017 with sales of 10,855 units (May 2016: 7,926), most of them being the Tiago hatchback, Tigor sedan and Hexa SUV.

Mayank Pareek, Head, PV business unit, Tata Motors, said, “Tata Motors continues to grow on a positive course at the back of strong performance of the new-generation cars like the Tiago, Tigor and Hexa. However, the uncertainty and different interpretations of GST will impact the buying sentiment in June 2017.”

Meanwhile, Ford India recorded sales of 6,742 units (+16.64%) in the domestic market (May 2016: 5,780). The company’s exports rose 45 percent YoY to 16,761 units during the month.