Passenger vehicle sales remain subdued in January

Poor consumer and market sentiment and a liquidity crunch have kept dealer inventories higher than usual to become a cause of concern for most manufacturers in the PV space at the onset of the new calendar year.

By Mayank Dhingra calendar 01 Feb 2019 Views icon9820 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

As vehicle manufacturers kept releasing their domestic sales numbers on a busy day when the government was simultaneously announcing the Interim Budget, the performance at major carmakers remained rather dull.

While sales in the last month of any calendar year are usually slow due to inventory correction, the impact has been a little prolonged this time around, with January 2019 numbers also being in the red for most car manufacturers. The impact is clearly that of liquidity crunch and the political situation in view of the upcoming general elections, both of which are keeping the public at bay from opening their purses and splurging on four wheels at this juncture.

Maruti Suzuki India: The bellwether of the Indian PV sector, Maruti Suzuki India registered total domestic sales of 139,440 units in the month, reporting flat growth of 0.2 percent. Its entry level duo of the Alto and Wagon R went home to 33,408 buyers and remained absolute flat (January 2018: 33,316). Maruti launched the latest generation of the Wagon R on January 23 and anticipates further growth from the popular hatchback which has garnered sales of over 2.2 million units for the company since its launch in 1999.

Sales of its pack of compact cars which includes the Swift, Celerio, Ignis, Baleno and the Dzire, dipped by 3.5 percent and to 65,523 units (January 2018: 67,868).  The company also gave a mid-life refresh to the much popular Baleno hatchback, which has sold over 500,000 units for the Japanese carmaker in India, and now gets a host of features becoming standard right from its lower variants in its facelifted avatar.

While Ciaz sales slumped a significant 42 percent to settle with sales of 2,934 units (January 2018: 5,062), Maruti’s quartet of UVs – the S-Cross, Vitara Brezza, Ertiga and Gypsy – clocked 22,430 units and registered growth of 8.4 percent (January 2018: 20,693). The Omni and the Eeco remained the ones to be witnessing the highest growth rate of 23.6 percent with sales of 15,145 units (January 2018: 12,250).

Hyundai Motor India: The No. 2 carmaker by sales volumes, Hyundai Motor India also recorded flat growth with sales in January touching 45,803 units (January 201: 45,508). While the company did resurrect the Santro brand in October last year, its regular models including the Grand i10, Elite i20 and Creta are seemingly doing better than what it had expected from the once popular entry-level hatchback brand in the country.

Mahindra & Mahindra: Rising fuel prices and the liquidity crunch have led the home-grown UV specialist to dole out flat numbers too with the company selling a total of 23,872 units in the PV space in the month (January 2018: 23,686).

Commenting on the performance, Rajan Wadhera, president, Automotive Sector, M&M, said, “The first month of the new calendar year continues to be on an overall growth path. There is buoyancy in rural growth, commodity costs are levelling, fuel prices are coming down and we see improvement in Forex movement, which in turn will drive positive customer sentiment. Having successfully established the Marazzo and Alturas brands and with the upcoming launch of our new compact SUV, the XUV300, we are positive on our outlook”.

Honda Cars India: Japanese carmaker Honda Cars India has emerged as the sole manufacturer to observe a reasonable growth rate amidst a weak financial environment. The company registered cumulative domestic sales of 18,261 units in the month as against 14,838 units sold in January 2018 to record notable 23 percent growth.

Commenting on the results, Rajesh Goel, senior vice-president and director, Sales and Marketing, Honda Cars India, said, “Honda Cars India’s sales efforts backed by excellent support from dealers, helped us achieve the sales growth of 23 percent in January. Responding to the tepid market situation with extensive marketing efforts including on-ground activations focusing on Tier 2 and 3 markets drove sales of all Honda models in the month.”

“With additional benefits in Direct Taxes announced in today’s Interim Budget, we expect the consumer sentiment to improve in the coming months,” he added.

Tata Motors: The company, like other PV players, was affected by low customer sentiment caused by non-availability of retail finance and liquidity crunch in the market. Its PV domestic sales witnessed a drop of 11 percent, at 17,826 units, as compared with 20,055 units sold last year. The cumulative sales in the domestic market for the fiscal (April 2018-January 2019) were at 174,223 units, a growth of 17 percent, compared to 149,284 units, in the same period, last fiscal. The recently launched Harrier has received a good response in the market and the company is expecting to witness good volumes in the coming months as the production ramps up.

According to Mayank Pareek, president, Passenger Vehicles Business Unit, Tata Motors, said, “January 2019 has been a rather sluggish period for the entire auto industry and has resulted in muted consumer sentiment. Having said that, we are positive to bounce back in the months to come on the back of our new-generation products. This month has witnessed our UV segment grow by 3 percent. With the ramp up in the Harrier production we are expecting to continue this momentum. The Harrier has been very well received by our consumers. We will continue to strive towards driving volumes and increasing our market share as part of our on-going turnaround journey.”

Toyota Kirloskar Motor: Primarily a UV player as well, Toyota Kirloskar Motor registered overall domestic sales of 12,067 units in the month of January and remained flat in its performance like other manufacturers (January 2018: 12,351).

Commenting on the sales performance, N Raja, deputy managing director, Toyota Kirloskar Motor, said, “With the closure of special offers / year-end schemes the buying sentiment has witnessed a dip this month. The tightening of vehicle financing availability has also added to the challenges in the market.”

With declaration of income tax exemption for the lower- and middle-class income groups in the Interim Budget for FY2019-20, the Indian PV industry could now see some respite and demand coming back into the market from the entry-level segment. Moreover, with a mandatory need to upgrade vehicles to meet safety norms, manufacturers are looking forward to reignite the excitement with facelifts and new model launches later through the year. While FY2018-19 is almost at the verge of closure, all hopes now lie on the next fiscal to bring back positivity to a rather promising and important sector in the country’s economic scenario.


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