Automakers seek Budget bounty as January sales show muted volumes

February 4, 2013: Passenger car sales in the first month of the new year continued to play out the skidding act with January 2013 numbers falling by 13 percent year on year. The worst hit were Tata Motors, Toyota Kirloskar Motor and Ford India. But it’s not that the others fared better as the combination of high interest rates, increasing fuel prices and poor market sentiment saw hugely reduced footfalls in OEM showrooms.

Maruti Suzuki India, the country’s largest carmaker, reported an overall (domestic and exports) 1.06 percent drop in sales at 114,205 units in January. Overall sales were adversely affected by the 22 percent decline in exports at 11,179 units (January 2012: 14,386). Domestic sales saw a marginal 2 percent increase at 103,026 units (January 2012: 101,047 units).

Hyundai Motor India, India’s second largest carmaker, posted a 4.3 percent overall sales growth. While domestic sales grew 1.2 percent to 34,302 units (January 2012: 33,900), exports grew 10.8 percent to 17,722 units (January 2012: 16,001). The company has announced a price rise across its model range, starting from the Eon hatchback through to the Santa Fe SUV by up to Rs 20,878, citing a rise in input costs and currency fluctuations. HMIL’s segment-wise cumulative sales for January 2013 are A2 segment 45,297 units (Eon, Santro, i10, i20); A3 6,164 units (Accent and Verna); A4 segment 488 (Elantra) ; A5 20 units (Sonata); SUV 55 units (Santa Fe).

Commenting on the sales, Rakesh Srivastava, vice-president (sales & marketing, HMIL, said “The market was subdued on account of macro-economic factors. For Hyundai, the year has started on a positive note with growth in its domestic and export sales. The change in the price differential between petrol and diesel prices has increased interest in petrol cars, reflecting in the waiting period of models like Eon, i20 and Verna petrol.

Marketing initiatives in the rural markets are bringing volume growth.” Mahindra & Mahindra, which has since the past year been riding the demand for SUVs, posted a 33 percent sales increase. The company sold 26,555 units during January 2013 (January 2012: 19,975). According to Pravin Shah, chief executive (automotive division), M&M, “The recently announced reduction of 25bps both in the repo and CRR rates is a positive step and is expected to bring in the desired momentum in the market.”

Like M&M, Renault India too is reaping the benefits of growing sales of its Duster SUV. Burgeoning demand for the SUV, which sold 3,554 units, saw the carmaker post a total of 4,914 units in January. The other contributors were the Scala (812 units), Pulse (403 units), Fluence (108 units) and Koleos (37 units). With January 2013’s sales, the company has sold a total of 37,508 units in the first 10 months of the fiscal (April 2012-January 2013).

The Duster has been on a roll since its launch last year. Last month, it also won the prestigious Autocar Car of the Year 2013 award along with awards for the SUV of the Year and Best Viewer’s Choice. “2012 was a year of growth for Renault India, with over 35,000 units sold across India as well as starting the export of the Duster,” said Sumit Sawhney, executive director (marketing & sales), Renault India. He added, “The new year is now all set to see us continue this drive with strong domestic sales in January. It is also a reflection of the rising confidence among both customers and industry experts about Renault in India.”

Honda Cars India notched a handsome 205 percent growth. Its January sales tally was 5,451 units (January 2012: 1,784), as consumers took to the Brio hatch in a bigger way.

Tata Motors, which saw sales decline sharply in December 2012, continued its dismal run in January. Its sales of 15,209 units (January 2012: 34,669), down 56 percent are the worst fall in the current 2012-13 fiscal year. As per the company’s sales data, it sold 11,192 units of the Nano, Indica and Indigo range along with 4,017 units of the Sumo, Safari, Aria and Venture vehicle range.

Toyota Kirloskar Motor too suffered a sales decline. At 13,329 units (January 2012: 17,395), January sales were down by 23 percent. Along with exports of 1,791 units of the Etios series to South Africa during January 2013, TKM registered total sales of 15,120 units. Sandeep Singh, deputy managing director and chief operating officer (marketing & commercial), said: “The market is still witnessing a slowdown, especially the passenger car segment. The prospects for the second half of 2013 look better. The repo rate cut is a welcome step. With the Budget around the corner, we are looking for some more measures that will bring about positive growth.”

Ford India, which is gearing up to launch the EcoSport SUV in April, posted a sales fall of 33 percent with 6,062 units (January 2012: 9,137). Along with exports of 1,053 Figos (January 2012: 1,652), the company sold a total of 7,115 units in January 2013. “Despite a tough business environment with the hike in fuel prices and ongoing high interest rates, consumer interest in Ford vehicles continues to hold steady. To offset the prevailing tough conditions and introduce buoyancy into the market, we hope the government will introduce regulatory policies that are conducive to the growth of the automotive industry. We believe that the reduction in the differential between diesel and petrol prices and recent RBI’s decision to cut repo rate are progressive steps and should continue,” said Vinay Piparsania, executive director, marketing, sales and service, Ford India.

General Motors India, which launched the Sail saloon on February 1, posted a sales decline of 8 percent with 7,588 units (January 2012: 8,241).

Hero MotoCorp back in the numbers

Market leader Hero MotoCorp, riding on robust volumes driven by its Splendor and Passion brands and growing sales of new products like the Ignitor, Passion X-Pro bikes and Maestro scooter, sold a record 557,797 units in January (January 2012: 506,426), a 10.14 percent increase. Its January sales are the highest-ever sales for any single month, the previous highest being in May 2012 when Hero MotoCorp had sold 556,644 units.

Commenting on the performance, Anil Dua, senior vice-president (Marketing & Sales), Hero MotoCorp, said: “Our new motorcycle launches like Ignitor and Passion X-Pro are receiving excellent customer response, while growth in our scooters -- Pleasure and Maestro -- is outpacing the industry growth. The overall two-wheeler industry is again showing good volumes, and we are hopeful of keeping up the momentum.”

In January, Hero MotoCorp commenced construction of its fourth manufacturing plant and the Global Parts Centre (GPC) at Neemrana in Rajasthan. The company will invest a total of Rs 550 crore in setting up these facilities.

Meanwhile, Honda Motorcycle & Scooter India (HMSI) is maintaining its consistent growth. In January, it posted a 21 percent increase with sales of 230,304 units (January 2012: 189,351). On January 18, the company opened its state-of-the-art Honda Technical Centre in Manesar and also revealed its updated scooter line-up for the year, powered by new-generation Honda Eco Technology aimed at delivering up to 11 percent improved fuel efficiency. Bajaj Auto, which rolled out its new Discover 100T last month, notched sales of 219,142 units during January 2013, down 0.79 percent YoY (January 2012: 220,879).

TVS Motor Company’s domestic two-wheeler sales in January totaled 154,107 units (Janaury 2012: 153,104). While motorcycle sales were 64,555 units (January 2012: 65,608 units), scooters registered sales of 37,946 units (January 2012: 41,469 units), down 8.5 percent and indicative of the fact that new scooters in the market are grabbing TVS’ share.

Suzuki Motorcycle India, riding on sales of the commuter bike Hayate, sold 39,982 units (January 2012: 35,099), a 14 percent increase. Speaking on the results, Atul Gupta, vice-president, sales and marketing, SMIPL, said: “We have received a good response from the market for all our products. The growing customer satisfaction has led to positive word-of-mouth in the market.”

Meanwhile, India Yamaha Motor registered an increase of 13 percent with sales of 29,785 units (January 2012: 26,300).

AMIT PANDAY