India car sales fall for eighth month in a row, 2-wheelers and CV too feel pressure of the slowdown

July 2, 2013: As OEMs reveal their domestic sales numbers for June 2013, the writing on the wall is clear: this fiscal year is going to be a very tough one, although industry body SIAM has said that green shoots of recovery should be seen by the third quarter of 2013-14. Despite most carmakers offering handsome discounts, freebies and special exchange schemes to draw new car buyers, a slowing economy, rising prices of both petrol and diesel and high interest rates are making consumers delay their purchase decisions.

Maruti Suzuki India, the country’s largest carmaker, and Mahindra & Mahindra, the leader in utility vehicles, both reported substantial declines in their June 2013 sales. Maruti posted a decline of 7.8 percent, selling a total of 77,002 units (June 2012: 83,531).

Worryingly for the carmaker, sales have fall in all segments. The entry level pack (Maruti 800, Alto, A-star and Wagon R) saw sales dip by 8.4 percent to 31,314 units (June 2012: 34,198), the premium hatchbacks (Swift, Estilo, Ritz) were down by 7.2 percent to 20,996 units (June 2012: 22,624), the SX4 down 23 percent to 314 units ((June 2012: 408) and the popular Dzire down by 8.7 percent with sales of 12,548 units (June 2012: 13,741). As a result, Maruti’s overall passenger car sales were down 8.2 percent to 65,172 units compared to 70,977 units sold in June 2012.

The UV category (Ertiga MPV, Gypsy and Grand Vitara) saw sales down by 11.4 percent to 4,997 units (June 2012: 5,638) while sales of the Omni and Eeco van duo fell marginally by 1.2 percent to 6,833 units (June 2012: 6,916). On the export front too, Maruti has taken a 43 percent hit with sales down top 7,453 units compared to 13,066 units exported in June 2012.

Maruti has been witnessing a sales decline since the past few months and has been making efforts to stem it. On June 15, it rolled out the CNG-powered Ertiga Green, the sixth factory-fitted CNG vehicle after the Alto, Wagon R, Eeco, SX4 and Estilo. And, in a bid to boost new car sales, the carmaker had also billed June 2013 as the ‘Exchange Month’ wherein its countrywide network of True Value showrooms and dealers were to reach out to over 500,000 customers. The initiative was to go beyond the metro cities to cover Tier 1 and Tier 2 locations.

Mahindra&Mahindraisalsofeeling the pressure from slowing sales. Its passenger vehicles segment (which includes utility UVs, the Verito saloon and the recently launched Verito Vibe) sold 17,232 units in June 2013 as against 19,792 units during June 2012. In the fiscal year to date (April-June 2013), M&M sold a total of 60,224 vehicles compared to 61,500 units in the April-June 2012 period, down 2 percent.

The company’s total domestic vehicle sales fell seven percent in June 2013 -- 36,207 units as against 38,951 units during June 2012. Commenting on the June 2013 sales, Pravin Shah, chief executive, Automotive Division, Mahindra & Mahindra, said, “We have witnessed a de-growth in June 2013 amidst an overall decline in the auto industry. The depreciating rupee resulting in spiraling fuel costs coupled with high interest rates and the additional excise duty on SUVs has further dampened the industry without any substantial revenue to the government. Going forward, we do hope that some immediate short-term measures are announced and implemented by the government to bring back buoyancy in demand which is the need of the hour."

Toyota Kirloskar Motor, which sold 11,010 units in June 2013, saw its sales slide by 25 percent (June 2012: 14,700). Commenting on the numbers, Sandeep Singh, deputy managing director and chief operating officer (Marketing and Commercial), said: “The overall weak economic conditions continue to keep the market sentiments low and the market sluggish. We have seen an increase in sales when compared to last month. We have been able to keep the inventory levels low, both at TKM and dealer’s end. We hope to see the market improve after the monsoon and during the festive season.”

Meanwhile, Honda Cars India, riding high on demand for the Amaze saloon, reported growth of 248 percent, selling 9,297 units as against 2,667 units in June 2012.JnaneswarSen, senior vice-president (Marketing &Sales), said: "We are extremely delighted with the consumer response to the Amaze, which already has more than 18,000 customers. We hope to add many more going forward."

The Japanese carmaker sold a total of 4,965 Amaze cars, 2,375 Brios, 1,830 Citys, 27 Accords and 100 CR-Vs.

Ford India, which launched the much-awaited EcoSportcompact SUV on June 26, saw its domestic sales grow 14 percent to 7,145 units (June 2012: 6,267). VinayPiparsania, executive director (marketing, sales and service), said: "The surge in Ford India's domestic wholesales is a strong indicator of customers' acceptance of our quality products with smart features that they truly want and value.”

General Motors India reported a 10.71 percent decline in its June 2013 sales -- 6,575 units versus 7,364 units sold a year ago. Meanwhile, Nissan Motor India, which is all set to launch the new Micra on July 3, sold a total of 2,954 units in June 2013, down 29 percent on 4,167 units sold in June 2012. Interestingly, the Micra, at 1,989 units sold, comprised the bulk of June 2013 sales, which is indicative of dealers clearing stocks with attractive offers. The Sunny contributed 918 units, the Evalia MPV 36, the Teana eight and the X-Trail SUV three.

Slowing sales for two-wheeler makers to

The slowdown is hitting the two-wheeler OEMs and other than HMSI and India Yamaha Motor, the others saw sales dips. Hero MotoCorp sold a total of 502,279 units in June, down nearly six percent (June 2012: 534,091). The company yesterday announced purchase of a 49 percent stake in Erik Buell Racing.

Honda Motorcycle & Scooter India, which opened a new plant in Karnataka to help reduce the demand-supply mismatch for the Activa and Dream Yuga, notched an 11 percent increase in sales. It sold a total of 252,114 units in June 2013, comprising 120,639 motorcycles (up 17 percent YoY) and 131,475 scooters (up 6 percent YoY).

Meanwhile, Bajaj Auto which is experiencing a labour crisis at its Chakan plant, sold 254,544 units in the month, down 20 percent year on year (June 2012: 318,377). TVS Motor Co sold a total of 137,331 units in June 2013, down 7.14 percent as against 147,893 units in June 2012. Motorcycles sales stood at 59,015 units in June 2013 against 61,274 units in June 2012. Scooters registered sales of 38,684 units in June 2013 against 38,166 units in the same month of the previous year. Yamaha Motor India Sales registered a growth of 46 percent, selling 35,561 units in June 2013 as against 24,318 units sold in June last year.

Commercial vehicle makers feel the heat

Tata Motors witnessed yet 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 launch the second product from the Ashok Leyland-Nissan tie-up. The passenger car-cum- smallCV, the Stile, will be launched 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 Motorsonce again dropped numbers in June 2013. While total sales of trucks and buses put together fell by 18 percent to 3,090 units in June 2013 (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 dropped 8.8 percent from 1,049 units to 957 in June ’13. Heavy duty trucks registered a 29.6 percent fall to close at 368 units, compared to 523 in June 2012.

Mahindra & Mahindra’s four-wheeler commercial segment which includes passenger and load vehicles registered 5 percent growth, having sold 13,761 units (June 2012: 13,103).