May 2019 saw passenger vehicles (PVs) register negative growth of 20.55 percent with 239,347 units (May 2018: 301,238) and post their poorest performance after September 2001, when the segment had fallen by 22 percent.
The sales downturn is here and present and the turbulence has been continuing for close to 10 months, starting off right from August 2018 with the devastating floods in Kerala. While various other economic factors have been at play causing this downturn, the industry has been hopeful of a recovery from what was unanticipated. Sales of some of the best-selling models in the PV space in May have dropped as high as 43 percent and are indicators to the fact that survival is getting tougher on the ground what with most OEMs offering a slew of discounts even on their fast-moving products. Let’s take a closer look at the Top 10s in May.
While the Maruti Swift remains at No. 1 position, which resonates with the huge popularity of this family hatchback in India, an 11 percent YoY drop in sales is a big worry for the country’s largest carmaker. The Swift’s numbers are down to 17,039 units from 19,208 units in May 2018. What is even more worrisome for the carmaker is the fact that the top-selling car could only breach the 17,000 unit mark, when last May had seen the pricier Dzire sedan clocking sales as high as 24,365 units.
At No. 2, the Maruti Alto saw despatches of 16,394 units and declined a significant 25 percent (May 2018: 21,890). India’s best-selling entry-level small car was recently updated with a host of safety features in the wake of the upcoming norms in October, and was also introduced with a BS VI complying engine, a full 11 months ahead of the April 2020 deadline.
The Maruti Dzire drops two positions down to No. 3 with a cumulative 33 percent drop in its performance, closing in at 16,196 units (May 2018: 24,365). While the Dzire has been a trendsetter in the compact sedan space, Honda’s latest second-generation Amaze is wooing buyers its side. With dealer stocks aplenty, the Dzire is running discounts as high as Rs 47,500 in some cities.
Younger sibling Maruti Baleno too drops one position to No. 4 with overall sales of 15,176 units in the month, a 22 percent decline (May 2018: 19,398). The Baleno was the first in the Maruti stable to receive a BS VI upgrade earlier in April whilst also getting a new 1.2-litre DualJet K12C petrol motor coupled with mild-hybrid technology.
The newest kid on the block, Maruti Wagon R has fared marginally better but still registers a sales slump of 9 percent to sell 14,561 units (May 2018: 15,974). This latest tallboy iteration has grown in almost all proportions as it is now built on a completely new platform. The Wagon R has also received a BS VI upgrade in its 1.2-litre petrol engine option.
The Maruti Eeco van springs a surprise at No. 6 position with deapatches of 11,739 units. The van has twice been able to cross the 10,000 unit mark since it was launched in January 2010, the last instance being April 2019.
At No. 7, the popular Hyundai Creta also hit a roadblock and sales slid 18 percent to 9,054 units (May 2018: 11,004). The crossover is set to face even fiercer competition from the just-revealed Kia Seltos SUV, which will go on sale in Q2 of this fiscal.
The Hyundai Elite i20 gains one spot to No. 8 and replaces younger sibling Grand i10 from the list, albeit still dropping 16 percent in volumes to 8,958 units (May 2018: 10,664). The i20 was already feeling the heat from the Maruti Baleno, and the same car is now going to come as a competition from the Toyota stable too, as the new Toyota Glanza.
The Maruti Ertiga, the sole MPV in the Top 10 list, makes an entry into the Top 10 chart after two years with sales of 8,864 units. However, the high-selling Maruti Vitara Brezza, India’s best-selling SUV, drops four spots to 10th place with a notable 44 percent decline in its sales. In May 2019, the Brezza has 8,781 units to its name versus 15,629 units in May 2018. This number also sees the longstanding UV market leader lose its crown to the Hyundai Creta.
What’s clear is that PV market will take a while to regain buoyancy. Dealer body FADA has asked OEMs to reduce inventory levels and most vehicle manufacturers are also resorting to production cuts through frequent planned and unplanned production cuts and plant shutdowns. Apex industry body SIAM has urged immediate government intervention and a reduction in the GST from 28 percent to 18 percent to bring footfalls back into the showrooms.
Not all is gloom and doom though because a slew of new model launches and reveals continues and might just help bring back excitement in the market.
Also read: Top 5 Utility Vehicles in May 2019