Fuel hikes, poor buyer sentiment hit June 2013 sales

Sales continued to fall in June 2013 as buyers stayed away even as carmakers try to better manage their inventories at factory and dealer levels. All eyes are now on a good monsoon and a likely sunny festive season. Amit Pandayreports.

With the first quarter of 2013-14 coming to an end, the slowdown in the passenger vehicle industry shows no signs of abating. A falling rupee, frequent petrol and diesel price hikes and dampened buyer sentiment saw buyers stay away in June 2013 even as new models, refreshes and limited editions did little to revive sentiments.The month has been one of the slowest for 2013 as the major carmakers such as Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Toyota Kirloskar Motor, General Motors India, Volkswagen India, and Nissan India reported sliding sales numbers year on year. Hyundai Motor India sales remained flat for the month. New product offerings in the form of the Honda Amaze and Ford EcoSport helped Honda and Ford India respectively from registering poor numbers.

Reporting a decline of 7.8 percent, Maruti Suzuki India sold a total of 77,002 units in June 2013 (June 2012: 83,531 units). The carmaker saw sales fall across all its categories with entry-level hatchbacks (M800, Alto, A-Star and WagonR) posting sales of 31,314 units against 34,198 units sold in June 2012, down 8.4 percent. Individually, the Alto sold 20,077 units as against 12,548 units for the Dzire, reclaiming the top slot it lost in May 2013.The compact hatch category (Swift, Ritz and Estilo) sold 20,996 units, down 7.2 percent on 22,624 units sold in June 2012. Dzire sales were down by 8.7 percent to 12,548 units (June 2012: 13,741 units). While the SX4 sold 314 units (June 2012: 408 units), down by 23 percent, the UV segment which largely accounts for Ertiga sold 4,997 units, down by 11.4 percent (June 2012: 5,638 units). Van sales were flat with sales of 6,833 units (June 2012: 6,916 units), down 1.2 percent. Maruti has been making efforts to boost its monthly sales rolling out what it calls the country’s first green-MPV, the CNG-powered Ertiga. It also marked June as the ‘Exchange Month’ wherein its network of second-hand car showrooms, True Value, targeted reaching out to around 500,000 customers across metro, Tier 1 and Tier 2 cities.Hyundai Motor India recorded flat sales at 0.53 percent during the month with its domestic tally of 30,610 units (June 2012: 30,450 units). The i10 and Eon sold 8,174 units and 7,770 units respectively in the month.

Mahindra & Mahindra too saw a 13 percent fall selling 17,232 units (June 2012: 19,792 units) in its passenger vehicle category comprising UVs, Verito saloon and Vibe. The Bolero sold 7,987 units in the month, lower than year-earlier sales of 8,205 units, and its lowest tally since August 2011. Pravin Shah, chief executive, automotive division, “The depreciating rupee resulting in spiralling fuel costs coupled with high interest rates and the additional excise duty on SUVs has dampened the industry. Going forward, we do hope the government will take some immediate short term measures to bring buoyancy in demand.” Tata Motors, which launched a slew of refreshes last month, sold 11,804 units in the month (June 2012: 17,244 units), down by 31.55 percent. The eight refreshed models include the Indigo eCS, Sumo Gold, Indica, Nano and the Explorer edition of the Safari Storme. The new CNG range (christened e-max) includes the Indica, Indigo CNG and Nano CNG. While sales of the Nano, Indica and Indigo stood at 9,628 units, the Sumo, Safari, Aria and Venture range of passenger vehicles managed to sell only 2,176 units. The Nano sold a respectable 2,003 units, its best showing in recent months. With a CNG-powered Nano close to launch, it remains to be seen if this will rejuvenate sales for the car.

Toyota Kirloskar Motor reported a fall of 25.10 percent by selling 11,010 units (June 2012: 14,700 units). Marking sales of over 400,000 Innovas since its 2005 launch, the company launched a limited chrome kit for customers. Sandeep Singh, deputy MD and COO, marketing and commercial, said: “The overall weak economic conditions continue to keep the market sluggish. We have been able to keep the inventory levels low, both at TKM and the dealer’s end.” Riding high on the success of the Amaze, Honda Car India reported a whopping growth of 248.59 percent, albeit on a low base, selling 9,297 units during June 2013 (June 2012: 2,667 units). The Amaze stood out as the top performer among all models with 4,965 units, followed by the Brio (2,375 units). The City, Accord and CR-V sold 1,830, 27 and 100 units respectively. Renault India sold a total of 6,007 units on a low base of 787 units sold in June 2013. The company sold 4,523 Dusters, 772 Scalas, 497 Pulse hatchbacks and 215 Fluence saloons.

Ford India reported a growth of 14.01 percent by selling 7,145 cars during June 2013 (June 2012: 6,267 units). Strongly backed by the EcoSport, which rolled out in the last week of June 2013 starting with a killer price tag of Rs 5.59 lakh for the base 1.5 petrol model, sales have seen a considerable surge during the month. The compact SUV reportedly sold 4,002 units in June. General Motors India sold 6,575 units in June 2013 as against 7,364 units sold in June 2012, down 10.71 percent. The company is leveraging discount schemes through its dealers to boost the sales. Schemes include up to Rs 60,000 off on the Cruze along with corporate discounts, free insurance policies for the buyers of Beat and many more. Nissan Motor India sold 2,954 units in June 2013, down 29.11 percent on 4,167 units sold in June 2012. The Micra was the largest seller with the company selling 1,989 units followed by Sunny which sold 918 units. The Evalia MPV sold 36 units while the Teana and X-Trail sold eight and three units respectively. Selling 750 units in June 2013, Audi India reported a growth of 4.45 percent over 718 units sold in June 2012. The company’s total sales are 4,846 units between January-June 2013 against 4,000 units sold in the January-June 2012 period, up 21 percent.” We remain on track to achieve our annual target of 20 percent growth for 2013,” says Audi head, Michael Perschke.

Two-wheelers segment no different

Hero MotoCorpmarked another month of over 5,00,000 despatches by selling 502,279 units but reported a 5.96 percent decline in the June 2013 tally (June 2012: 534,091 units). Anil Dua, senior vice-president, marketing &sales, said, “The 500,000 despatch for June comes close on heels of our record May sales. While market conditions continue to be sluggish, the early onset of the monsoons is a positive sign.” Due to labour issues at its Chakan facility, Bajaj Auto reported a decline of 20.05 percent, selling 254,544 units during the month (June 2012: 318,377 units). According to the company, the strike and the low efficiency at work has caused a loss of nearly 20,000 units to the Pune-based firm in the month. Honda Motorcycle & Scooter India (HMSI) reported sales of 252,114 units during June 2013, up 11.10 percent over 226,929 units sold in June 2012. Though the firm managed to stand out in the growing territory, momentum was clearly hit during the month. While the motorcycles are growing at a healthy 17 percent (June 2013: 120,639/June 2012: 103,195), scooter sales have slowed down to 6 percent growth (June 2013: 131,475/June 2012: 123,734). The company has also started production of Dream Yuga bikes and Activa scooters at its new plant near Bangalore. TVS Motor Company saw a drop of 7.14 percent selling 137,331 units in June 2013 (June 2012: 147,893 units). Meanwhile, buoyed by its scooter sales, Yamaha Motor India registered a growth of 46.23 percent, selling 35,561 units (June 2012: 24,318 units). Overall, June 2013 was a tough month for the industry to sail smoothly. With good rainfall across the country, OEMs are keeping their fingers crossed seeking growth revival in the market soon. Depressed consumer sentiments, a falling rupee which may well mean higher petrol prices (there were three hikes in June) and also diesel price increases mean that a turnaround seems unlikely for now.

Commercial vehicle manufacturers feel the heat too

Tata Motors witnessedyet another month in the red when sales dropped by 10.03 percent, with the company selling 36,908 units (June 2012: 41,026). LCVs accounted for 25,778 units (down 9.11 percent) and M&HCVs clocked 11,130 units (down 12.11 percent). Ashok Leyland sales fell by almost a third in June 2013. It sold 6,967 units in the month (June 2012: 10,146 units), registering a drop of 31.3 percent. Sales of CVs, excluding the Dost SCV, painted a more worrying picture, dropping from 7,421 units in June 2012 to 4,714 units in June this year, a decline of 36.5 percent. The company’s usual saving grace – the Dost – also disappointed, with sales falling by 17.3 percent to 2,253 units (June 2012: 2,725). Ashok Leyland is all set to reveal the second product from the Ashok Leyland-Nissan tie-up. The multi-functional vehicle, the Stile, will be displayed on July 16. The company will be pinning a lot of hope on the vehicle, which, like the Dost, will be badged as an Ashok Leyland product.Eicher Motors once again dropped numbers in June 2013. While total sales of trucks and buses put together fell by 18 percent to 3,090 units (June 2012: 3,767), sales of light duty trucks fell by 19.6 percent to 1,765 units (June 2012: 2,195). Buses, which give Eicher a fillip, also fell 8.8 percent from 1,049 units to 957 in June ’13. Heavy duty trucks registered a 29.6 percent fall at 368 units, compared to 523 in June 2012.Mahindra & Mahindra’s four-wheeler CVs, which includes passenger and load vehicles, registered 5 percent growth, having sold 13,761 units (June 2012: 13,103).