Dec sales stay in slump mode as cash-strapped buyers shun new cars

January 2, 2014: The news for automakers, particularly domestic passenger car OEMs, in the first couple of days of 2014 is not good. As the sales numbers for December 2013 trudge in, it is amply clear that calendar year 2013 has been one that automakers would like to put behind them. With sales falling for 11 of the 12 months, 2013 has been among the most challenging years in recent times.

In December 2013, despite the glut of handsome year-ending discounts and other freebies on offer, most automakers do not seem to have got consumers to loosen their wallets and make a purchase decision. Poor consumer sentiment, high fuel and loan rates continue to hit footfalls in vehicle showrooms as cash-strapped consumers delay new car purchases. Also, a number of OEMs had announced model prices increases, starting January 1, citing an increase in input costs on account of rupee depreciation and inflationary trends. What’s worse is that the poor sales trend is likely to continue through to mid-2014 at the very least even as the country awaits elections around May-June this year.

Maruti Suzuki India, the country’s largest carmaker, has posted only a single-digit increase in sales in December 2013, selling 86,613 units (December 2012: 82,073), up 5.5 percent. Entry level car sales (M800, Alto, A-star, Wagon R), were up 16.7 percent at 38,286 units (December 2012: 32,797) while the premium compact trio of the Swift, Estilo and Ritz sold 19,171 units (December 2012: 22,482), down 14.7 percent. Despite aggressive sales of its arch rival, the Honda Amaze, sales of the popular Dzire grew 18 percent to 15,427 units (December 2012: 13,076). The SX4 is fast falling out of favour and sales slid 17.6 percent to just 271 units (December 2012: 329). Maruti UV sales including those of the Ertiga, Grand Virara and Gypsy at 5,146 units during December 2013 were down 5.5 percent (December 2012: 5,447). Omni and Eeco sales at 8,312 units were up 5.3 percent (December 2012: 7,897). Maruti exports in December were down 67 percent to 4,311 units (December 2012: 13,072)

Meanwhile, Hyundai Motor India, which sold 28,345 cars last month (December 2012: 26,697), notched 6.2 percent growth, mainly on the back of growing demand for its recently launched Grand i10 hatchback which has sold around 33,000 units since its launch in September 2013.

Mahindra & Mahindra, which has been feeling the brunt of the pressure since excise duty rates were further revised in April 2013, sold a total of 16,436 vehicles (including UVs, Verito and Verito Vibe), down 27.8 percent (December 2012: 22,761).

Commenting on the company’s December sales, Pravin Shah, chief executive, Automotive Division, Mahindra & Mahindra, said, “During the first nine months of the current fiscal, the auto Industry has seen a negative growth due to sustained deceleration in economic activity and consequent weakness in consumer and business sentiments. While the immediate turnaround in the auto Industry is not expected without certain policy corrections and support, the worst seems to be over. At Mahindra, we continue to focus on customer centricity and do hope that the new year will bring in the much-needed cheer for the auto sector.”