Indian carmakers firing on all cylinders as sales zoom in June, Q1 numbers indicate a strong fiscal

Coming on the back of strong passenger vehicle industry sales in April and May 2018, June also promises to be a month of robust sales in India. Given the sales numbers announced by leading OEMs, and typically led by the industry bellwether Maruti Suzuki India, expect overall sales numbers, when announced by apex body SIAM 

Maruti Suzuki India, which sold 134,036 units to notch 44 percent year-on-year growth (June 2017: 93,057) albeit on a low year-ago base (for Maruti), is clearly headed for record sales this year. In the first quarter of FY2019 (April-June 2018), the carmaker has sold a total of 458,967 units (+24.9%), which puts it on line to achieve sales of over 1.9 million units for the fiscal and tantalisingly close to its sales target of 2 million annual sales by 2020.

In June, Maruti’s quintet of compact cars – the Swift, Baleno, Dzire, Celerio and the Ignis – collectively went home to 71,570 buyers, registering growth of 76.7 percent (June 2017: 40,496). Of these, the Swift and the Dzire remain the top grossers with the hatchback and the compact sedan siblings in their latest third-generation avatar having become hot customer favourites in their respective segments. In Q1 FY2019, these 5 cars have sold a total of 232,667 units, marking handsome 49.8 percent growth and indicative of the fact that demand has returned to the passenger car sector, in light of the sharply rising petrol and diesel prices.

The entry-level Alto and Wagon R posted combined sales of 29,381 units, posting growth of 15.1 percent (June 2017: 25,524), bouncing back from the sales decline in May 2018. For the first quarter of FY2019, these two cars see flat growth of 1.5 percent to 105,039 units.

Sales of the premium Ciaz sedan, however, continue to decline. The domestic market sales of the Ciaz, which is sold through the Nexa channel, have hit a new low of 1,579 units in June (-60%) compared to sales of 3,950 units in June 2017. In Q1 FY2019, the Ciaz has sold a total of 10,719 units, down 31.7 percent over a year ago.

With competition already fierce in the C-segment space, which just became fiercer with the recent entry of the Toyota Yaris, the Ciaz needs a sales accelerator to regain its lost sheen in the market.

While sales of Maruti vans - Omni and Eeco - grew 32.3 percent to 12,185 units (June 2017: 9ay 2017: 12,593); the quartet of UVs - the Gypsy, Ertiga, Vitara Brezza and the S-Cross sold a total of 19,321 units, posting YoY growth of 39.2 percent (June 2017: 13,879). In Q1 FY2019, Maruti UVs were bought by 65,754 new owners, up 15.1 percent.

The Vitara Brezza compact SUV, which has been leading the charge of driving the company's growth in the UV segment has also been recently updated by Maruti, giving it a breath of fresh air with a new Orange paint scheme, blackened alloy wheels, and the option of an Automated Manual Transmission (AMT) as well in its mid- and top-spec trims.

Hyundai Motor India, the longstanding No. 2 PV player, also posted strong sales. The Chennai-based carmaker sold 45,371 units, up 21 percent (June 2017: 37,562). For Q1 FY2019, cumulative sales are 275,136 units, a YoY growth of 8.6 percent (Q1 FY2018: 253,428). According to Rakesh Srivastava, director - Sales and Marketing, “The growth is led by the Grand i10, new Elite i20, New Creta and the new Verna.”

Hyundai Motor India, the longstanding No. 2 PV player, also posted strong sales. The Chennai-based carmaker sold 45,371 units, up 21 percent (June 2017: 37,562). For Q1 FY2019, cumulative sales are 275,136 units, a YoY growth of 8.6 percent (Q1 FY2018: 253,428). According to Rakesh Srivastava, director - Sales and Marketing, “The growth is led by the Grand i10, new Elite i20, the new Creta and the new Verna.”

A hard-charging Tata Motors, which is seeing a smart uptick in both its PV and CV sales, sold a total of 18,213 units in June 2018 (June 2017: 13,148, SIAM data). This, the company says, is driven by sustained and strong demand for the Tiago hatchback, Tigor sedan, Hexa crossover and the Nexon compact SUV. June also saw the combined production of Tiago and Tigor cross the 200,000 units milestone. In Q1 FY2019 (April-June 2018), Tata Motors’ cumulative sales of PVs in the domestic market are 52,937 units, up 52 percent YoY (Q1 FY2018: 34,858 units). 

Commenting on the sales performance, Mayank Pareek, president – Passenger Vehicles, Tata Motors, said, “We are delighted with the robust sales performance in June 2018, thanks to the continued strong demand for the Tiago, Tigor, Nexon and Hexa. We will continue to strive towards a sustainable win by driving volumes and increasing our market share as part of our ongoing turnaround journey.”

Mahindra & Mahindra’s (M&M) PV sales totaled 18,137 units in June 2018, which is a YOY growth of 12 percent (June 2017: 16,212). For Q1 FY2019, the company has sold 60,779 units, up 9 percent (Q1 FY2018: 55,995). Commenting on the performance, Rajan Wadhera, president, Automotive Sector, M&M Ltd. said, “We are happy to have garnered an overall growth of 26 percent for June. This growth is driven by both our commercial and personal vehicles portfolio. We hope that macro conditions such as fuel prices, interest rates and raw material prices remain at satisfactory levels to enable us and the auto industry to grow in the coming months.”

Honda Cars India announced sales of 17,602 units, which is 37.5 percent YoY growth (June 2017: 12,804). The big contributor to sales last month is the recently launched new Amaze sedan which went home to 9,103 buyers. The carmaker says it has received over 26,000 bookings for the new Amaze since the car’s launch. For Q1 FY2019, Honda has registered cumulative growth of 10.5 percent on sales of 42,609 units (Q1 FY2018: 38,562). According to Rajesh Goel, SVP and director, Marketing and Sales, Honda Cars India, “The response to the new Amaze has been excellent, giving boost to our June sales performance. We continue to maximise Amaze production to meet the strong demand. Early arrival of monsoon across India with prospects of abundant rains, should help rural wealth and spending, bringing cheer to the auto industry over the next few months.”

Ford India registered cumulative domestic sales of 8,444 units in June, registering a notable growth of 37 percent (June 2017: 6,149) and also reaching the milestone of 1 million domestic wholesales. Between April and June 2018, the company clocked overall sales of 24,941 units, up 21.61 percent (April-June 2017: 20,508). “The one million domestic wholesales highlights the success of our ongoing strategy of focusing on strong brand, right products, competitive cost and effective scale. The strategy has ensured us to grow ahead of the industry while increasing retail fuel prices, inflation and thereby interest rates continue to post challenges,” said Anurag Mehrotra, president and managing director, Ford India.