Maruti bucks slowdown woes

Passenger car sales have posted double-digit growth in the April-June quarter but not all is well in the segment. The worrying fact is that only one carmaker, Maruti Udyog is holding it all together, while others are wilting under the impact of high interest rates. While sales of the 800 have been dropping, Maruti has more than made up with higher volumes of its Alto, Wagon R, Zen and Swift models. As of late, the recently launched SX4 has also helped shore up Maruti’s mid-size offerings (which also consist of the Baleno and Esteem) to more than 11,000 vehicles in the quarter to June.

Interestingly managing director, Jagdish Khattar, instead of being pleased, is more worried about his company not meeting last year’s sales growth. Maruti has not missed its previous performance by much since sales this quarter grew 17 percent compared to 20 percent in the 2005/06 quarter. Even so it is coming up with new retail initiatives, the latest of which has been to convince its vendors to sell vehicles. The continuous demand of the SX4 is also going to boost Maruti's sales further in the next quarter.

TATA SALES FLAT

Sales of Hyundai’s Santro and Getz models were down at 39,961 units. A 49 percent dip in June alone has turned the fortunes of these two models in the quarter. The good news is that the Accent and Verna performed better and rose by more than 2,100 units. Tata Motors’ sales during the quarter remained flat, largely because a drop in the Indica was made up by improved results in the A3 segment, consisting of its Indigo and Indigo Marina models. Popular models like the Honda City, which saw the largest drop in its segment, as well as Ford’s lineup of Ikon, Fusion and Fiesta have found it tough.

New model launches have helped the fates of General Motors and Mahindra & Mahindra. The Chevrolet Spark and Aveo U-VA have accounted for a lion’s share (7,341 units) in the quarter to June, while the Logan has added over 5,000 vehicles to M&M’s numbers. Cumulatively, the sales of passenger cars, utility vehicles and multi-purpose vehicles gained 13 percent in the June quarter. There was a slight downturn in the medium and heavy commercial vehicles segment. However, light commercial vehicles saw an upturn of nearly 15 percent, thanks to the sustainable growth of the Tata Ace that has average sales of 6,500 vehicles a month.

ACE, APE FACE-OFF

Goods carriers rose 19 percent and volumes are expected to grow further, now that the Ace has direct competition in the form of Piaggio’s Ape Truk. Force Motors is touted to bring out its four-wheeler sub-one tonne offering soon. Even Bajaj Auto has of late talked about entering this category. Sales of light passenger carriers grew 21 percent. This segment will be seeing more action with the launch of the Magic from the Tata Motors stable.

The Magic is tipped against three-wheeler (three-seaters) from Piaggio, Bajaj and Atul Auto as well as the six-seaters of Mahindra & Mahindra, Force Motors and Scooters India. The Ace has clearly impacted three-wheeler goods carriers, where sales dipped 10 percent in the quarter. Three-wheeler passenger carriers too have dropped four percent.

The challenge from the Magic therefore is not good news for players in this segment. Taking the performance of the Ace as a yardstick and the mindsets it has changed, this might just be the beginning of things to come in semi-urban and rural passenger transport.

AMMAR MASTER