August turned out to be a not-so-August month for most passenger vehicle (PV) manufacturers. And it's due to a combined effect of the devastating floods in Kerala, which is a sizeable PV market, and the relatively high year-ago base effect.
Market leader Maruti Suzuki India itself felt the pressure and has reported total overall sales of 145,895 units in August 2018, down a considerable 3.6 percent (August 2017: 151,270). Other than the entry-level segment of the Alto and Wagon R and the new Ciaz, the company sees sales down in all its other segments, particularly felt in its UVs whose sales are down by 16.2 percent.
The Alto and Wagon R together sold 35,895 units, up 1.3 percent over year-ago sales (August 2017: 35,428), indicative of the fact that demand remains strong for these entry level hatchbacks, albeit in Tier 1 and 2 towns with urban India gradually making a shift to premium hatchbacks as their preferred entry models.
Maruti’s range of compact cars remains the key volume drivers, with the Maruti Swift and the Dzire running away in their respective segments. With the Ignis, Celerio and the Baleno included, the collective sales of these five models stood at 71,364 units last month, but 3.6 percent down on August 2017 sales (August 2017: 74,012). Expect the Dzire and the Swift to have contributed the bulk of the numbers, as they have for the past few months.
Maruti will be pleased with the initial market response to the Ciaz which has rolled out in a new avatar. In August 2018, the premium sedan went home to 7,002 buyers, up 8.4 percent (August 2017: 6,457), bringing a stop to the continually falling sales of the car for the past year.
Maruti will be somewhat concerned with the falling sales of its UVs. In July 2018, UV sales had dropped by 5 percent. Now in August, its UV portfolio, which comprises the quartet of the Gypsy, Ertiga, Vitara Brezza and the S-Cross, sold a total of 17,971 units (August 2017: 21,442).
The two Maruti vans, the Omni and the Eeco sold 13,663 units, down 1.9 percent (August 2017: 13,931).
While Maruti Suzuki still remains the king of the Indian PV market, its growth being driven by a handful of models out of an expansive line-up could be a cause of some serious concern over the longer term.
Hyundai Motor India, the country's No. 2 PV maker, too felt the pressure of slowing sales. Last month, the Chennai-based manufacturer sold 45,801 units, down 2.8 percent on year-ago sales (August 2017: 47,103).
Mahindra & Mahindra, which is launching its new Marazzo MPV today, sold a total of 19,758 units in August 2018, 1.81 percent up (August 2017: 19,406). Commenting on the monthly performance, Rajan Wadhera, president, Automotive Sector, M&M, said, “The auto industry remained subdued in August with low sentiments due to some external factorsWith the launch of the Marazzo, we hope to see buoyancy in our passenger vehicle numbers. With the upcoming festive season, we do expect a much improved traction for passenger and commercial vehicles alike”.
Tata Motors, which is riding a wave of demand for its PVs, continued its growth trend at 18,420 units sold in August 2018, higher by 28 percent (August 2017: 14,340). The company says the recently launched Nexon AMT is witnessing good traction in the market. While its passenger car sales registered a YoY growth of 9 percent, the UV segment grew by 93 percent. Cumulative sales of PV in the domestic market for the fiscal (April-August 2018) grew by 38 percent, at 88,436 units compared to 64,131 units for the same period, last fiscal.
Commenting on the sales in August 2018, Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors, said: “Due to heavy rains across the country and floods in Kerala, consumer sentiment was muted. Despite a challenging month, we have recorded a growth of 28 percent. The demand for our new-generation vehicles has helped us maintain this consistent month on month growth. August also marked the milestone of the 50,000th Nexon rolling out of the Ranjangaon plant. We will continue to strive towards driving volumes and increasing our market share as part of our ongoing turnaround journey.”
Honda Cars India registered monthly domestic sales of 17,020 units in August 2018, down 1.98 percent (August 2017: 17,365). In the April-August 2018 period, Honda has sold 79,599 units which points to 9 percent YoY growth (April-August 2017: 73,012) . Rajesh Goel, SVP and director, Marketing and Sales, Honda Cars India, said, “There was an impact of Kerala floods and heavy rains in many parts of the country combined with GST-related high base effect of August 2017. We hope to recover quickly and keep growing strongly with rollout of attractive offers through the festive season ahead.”
Meanwhile, Toyota Kirloskar Motor sold 14,100 units in August 2018, which marks YoY growth of 17 percent (August 2017: 12,017). Commenting on the sales performance, N Raja, deputy managing director, Toyota Kirloskar Motor said, “We deeply regret the flood situation in Kerala and other parts of South India. Despite the impact of the flood condition, we have been able to overcome the challenge with complete support of other dealers across other regions. Kerala is a very important market for us and we will work hard to get this market back to normalcy.
The Innova Crysta and Fortuner have been performing consistently as segment leaders, attributing to TKM’s domestic growth. The Innova Crysta has seen a YoY growth of 13 percent in January-August 2018. Other models continue to sustain the positive customer demand. The recently launched Dual Tone Liva Limited Edition has received overwhelming response from customers across markets in India. With rains being plentiful, we expect the rural demand to pick up in the coming month and hope for a push in customer demand in the festive season.
Ford India’s domestic wholesales in August rose 3.42 percent to 8,042 vehicles as against 7,777 units in the same month last year. Exports grew to 12,606 vehicles compared to 7,963 units in August 2017.