Poor demand on the back of a negative market sentiment has led most carmakers to post sluggish growth in June, as compared to the same month last year.

The continuation of the slowdown seen since April has been attributed to the high interest rates, rising petrol prices and fear that the Government may impose an additional tax on diesel cars. In fact, on a month-on-month basis, June sales have dipped for nearly all players versus May.

The second largest player, Hyundai, saw flat domestic sales in June at 30,450 units. Its exports were more encouraging with an 8 per cent rise (23,904 units).

Mr Arvind Saxena, Director, Marketing and Sales, Hyundai Motor India said, “Unless any triggers get activated, sentiment is not expected to improve very much. We are witnessing good volumes in South America and Africa. The Eon is being particularly well received in Africa and the i10 is strong in South America.”

The market leader Maruti Suzuki saw a 20 per cent rise in domestic sales for the month to 83,531 units. However, this is seen largely as an effect of the low base of June last year when it lost about 11 days of production at its Manesar plant because of a workers’ strike. This was in addition to a four to six day maintenance shutdown across both its Manesar and Gurgaon facilities.

With petrol prices now more expensive by about Rs 30 over diesel, carmakers with a large diesel car portfolio had some respite. However, Tata Motors was an exception to this rule.

The Bolero, Scorpio and XUV500 volumes boosted Mahindra & Mahindra’s sales by 23 per cent rise (19,792 units). Toyota Kirloskar grew 22 per cent to (14,700 units) on Innova, Fortuner and Etios sales.

The third largest player, Tata Motors, though posted a 22 per cent drop in sales in June to 17,244 units. Sales of the Nano compact were up 3 per cent (5,605 units), and utility vehicles (Sumo/ Safari/ Aria/ Venture) were up 5 per cent (3,649 units). But, a big hit came from a 35 per cent (5,332 units) drop in volumes for the Indica range and an even sharper dip of 46 per cent (2,658 units) for the Indigo range.

Though available in diesel, a lower demand for the Indica and Indigo is seen as a shift in demand to other alternatives in the market. Diesel models such as the Swift, Etios, Beat, Micra and Figo are believed to have eaten into the Indica sales, while there has also been a preference for other vehicles such as Etios and Dzire from taxi/fleet buyers.

Mr Pravin Shah, Chief Executive, Automotive Division, M&M said, “We expect the demand for utility vehicles industry to continue during the current financial year. Our opinion in the current industry scenario is to not to have any major changes in the policies including fuel prices in order to create an overall positive sentiment”.

General Motors and Ford both saw sales dip 11 per cent in June to 7,364 units and 6,257 units, respectively. Mr P Balendran, Vice President, General Motors India, said, “Substantial orders of Chevrolet Tavera are pending due to supply constraints on account of workers strike at vendor's end. We are not expecting the market to show any remarkable improvement before the festival season.”

Nissan has more than doubled sales to 4,167 units in June.

Two Wheelers

Hero MotoCorp saw sales going up 4 per cent to 5.34 lakh units, while Honda Motorcycle and Scooter posted a 52 per cent rise to 2.26 lakh units in June. Chennai-based two and three wheeler maker, TVS Motor’s sales dipped 7.5 per cent to 1.68 lakh units.

Bajaj Auto’s two and three wheeler sales (including exports) fell 1 per cent to 3.45 lakh units.

In the commercial vehicle (CV) space, Tata Motors saw a 4 per cent rise to 41,026 units. The growth was led by a 22 per cent rise in demand for light CVs to 28,363 units, though sales of medium & heavy CVs fell 21 per cent to 12,663 units in June.

Eicher Trucks & Buses saw sales going up 9 per cent in June to 4,064 units, largely driven by the sale of 1,114 units of buses.


(This article was published on July 2, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.