Contrary to expectations, 2017 has opened on a better note for most passenger vehicle manufacturers as the demonetisation-hit Indian economy gradually limps back to normalcy.
The first month of a new year always brings in good tidings and it is no different for 2017, albeit the difference is that the last two months of 2016 saw the economy and consumers alike being hugely impacted by the demonetisation of Rs 500 and Rs 1,000 currency notes.
It also helps that in India, as in other global markets, vehicle buyers prefer to have a new vehicle registration in the new year, which means some pent-up demand from the previous month (December 2016) would have been carried over into January.
Maruti Suzuki India, the barometer of the Indian passenger vehicle (PV) industry, set the tone for Indian PV sales when it announced sales of 133,768 units, up 25.7 percent year on year (January 2016: 106,383). This comes on the back of the company’s 4.4 percent sales decline in December 2016, which saw overall PV industry numbers down 1.36 percent
Importantly, for Maruti, sales of all its vehicles, other than the Dzire Tour taxi, are back in the black. The bread-and-butter duo of the Alto and Wagon R, sold 37,928 units in January 2017 (January 2016: 34,206), up 10.9 percent YoY, indicating return of consumer demand for the entry level cars. Sales of the six compact cars comprising the Swift, Ritz, Celerio, Ignis, Baleno and Dzire posted 25.2 percent growth at 55,817 units (January 2016: 44,575). The Dzire Tour, which is sold only as a taxi, sold 3,001 units, down 15.3 percent (January 2016: 3,545). The Ciaz premium sedan went home to 6,530 buyers, up 20.2 percent on January 2016 sales of 5,431 units. The two vans – Omni and Eeco – have given a fillip to overall sales numbers with sales of 14,179 units, up 35 percent (January 2016: 10,512). Meanwhile, Maruti Suzuki has a problem of plenty when it comes to the UVs, thanks to surging demand for its first-ever compact SUV, the Vitara Brezza. Total UV sales (Gypsy, Ertiga, S-Cross, Vitara Brezza) zoomed 101 percent YoY to 14,179 units (January 2016: 10,512). Maruti's UVs have, for the past few months, buffered slowing sales of its entry level cars but now it seems henceforth they will take on a new trajectory. For the past year or so, Maruti Suzuki, with its combined 1.5 million units manufacturing capacity at the Gurgaon and Manesar plants was running at full capacity utilisation. With the new Gujarat plant beginning commercial production from today, starting with the premium Baleno hatchback, the carmaker will be able to increase production of the much-in-demand Vitara Brezza, which continues to have a sizeable waiting period.
Hyundai Motor India, the No. 2 PV manufacturer, registered domestic sales of 42,017 units, up 10.52 percent (January 2016: 38,016). Commenting on the sales performance, Rakesh Srivastava, senior vice-president (Sales & Marketing), said, “2017 looks promising with the entire industry optimistically looking forward to positive growth. Hyundai has shown growth on account of a good performance by the Grand i10, Elite i20 and Creta and without any new mass model launches. The Union Budget will give boost to the economy, especially rural India, with its focus on infrastructure creating a robust business environment, thus helping the auto industry.”
Mahindra & Mahindra’s passenger vehicles division sold a total of 20,096 vehicles in January 2017, down 9 percent (January 2016: 22,088). According to Pravin Shah, president and chief executive (Automotive), M&M, “The auto industry continues to see mixed reactions and some of the segments including the rural market and the commercial vehicles category continue to face challenging times. Going forward, we expect Union Budget 2017 to positively impact the economy and also the industry, especially in view of the emphasis and the allocations made for rural, agriculture and infrastructure. We are confident that this will spur demand.”
Honda Cars India, which sold 15,592 units in January 2017, saw its numbers slide 9 percent year on year (January 2016: 17,135). The popular City continued to be Honda’s best-seller with 6,355 units, followed by the Amaze (3,911) and the Jazz (3,124). While the BR-V SUV sold 1,458 units, the Bio sold 627 units, Mobilio MPV sold 63. Since its launch in July 2014, the MPV has sold a total of 40,659 units in India – 26,841 petrol and 13,818 diesel.
Yoichiro Ueno, president and CEO, Honda Cars India, said, “Our sales results recovered in January as consumer sentiment and the currency situation have started improving gradually. We hope the situation normalises and the market recovers quickly.”
Thanks to growing consumer demand for the Tiago hatchback, Tata Motors is witnessing a consistent uptick in its sales. The company sold 12,907 PVs which mark a 20 percent growth (January 2016: 10,728). Meanwhile, following the launch of its new Hexa flagship on January 18, there has been a considerable buzz in the market; expect Tata Motors’ sales to get a fillip in its February 2017 sales.
Like Tata Motors, Toyota Kirloskar Motor is benefitting from introducing new models in the domestic market. The company posted 21 percent YoY growth with sales of 10,336 units (January 2016: 8,511). According to N Raja, director and senior vice-president (Sales & Marketing), “Three months into demonetisation and we can slowly see that the market is reviving with increased footfalls and customer enquiries. In fact, even with demonetisation in effect, we have still managed to record a 17 percent growth in sales in the past three months. This has been possible due to the overwhelming customer response to the new Fortuner and Innova Crysta.”
Ford India continued its growth momentum in January with a steady rise in domestic wholesales which grew 13 percent YoY to 7,995 vehicles (January 2016: 7,045). “We continue to grow faster than the industry which is a testament to our strategy focused on product-led innovation, delivering differentiated customer experience and busting the myth of cost of ownership,” said Anurag Mehrotra, executive director (Marketing, Sales and Service), Ford India.
“The industry continues to face short-term headwinds even as long-term outlook continues to be positive. The outlook is further strengthened by the government’s roadmap to boost rural economy, provide relief to personal income tax, and investment in further building the infrastructure. A timely implementation of GST is expected to make a significant positive impact on the economy while raising consumer sentiment in the months to come,” Mehrotra added.
In January, Ford India launched the technology and feature-laden ‘Platinum Edition’ of the EcoSport. This variant features a host of interior and exterior changes. New features include cruise control, an all-new eight-inch touchscreen infotainment system, satellite navigation, reverse parking camera, dual tone exteriors and larger 17-inch tyres with new alloys.
Nissan Motor India reported sales of 4,346 units comprising both the Nissan and Datsun brands in January 2017, a year-on-year growth of 62 percent (January 2016: 2,668). The company attributes the growth to positive customer response to the Datsun Redigo and the recently launched 2017 Nissan Sunny.
Commenting on the sales results, Arun Malhotra, managing director, Nissan Motor India, said, “We have started the new year on a positive note. Despite the challenging market conditions, we have seen a substantial year-on-year growth in January which signifies strong customer response and trust in the Nissan and Datsun brands.”
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