Economy

Carmakers expect better run in March

S Ronendra Singh New Delhi | Updated on March 31, 2014 Published on March 31, 2014

New launches, excise duty cuts are helping drive growth





Major car companies are expecting to close the last month of the 2013-14 fiscal with better domestic sales compared to those in February and January.

Maruti Suzuki India, Hyundai Motor India and Honda Cars India expect March to be the highest selling on a month-on-month basis. While Maruti Suzuki, the country’s largest carmaker, is banking on its latest ‘Celerio’, Hyundai is betting big on Xcent and Grand i10. Honda Cars’ sales are expected to be boosted by the Amaze and the new City.

“We will do better than January and February, and March will be highest in sales because of price reduction following the excise duty cut announced in the interim Budget in February,” Mayank Pareek, Chief Operating Officer-Marketing and Sales, Maruti Suzuki, told Business Line.

However, year-on-year (y-o-y), the industry is expected to see a sales decline of around 8 per cent because of various economic issues.

Last year, March was very good. Since the base was higher, there will be a decline y-o-y, Pareek said.

Hyundai also said while sales would continue to decline, these would be better in March on a month-on-month basis.

“Hyundai’s sales volume will be better in March than in January and February this year,” said Rakesh Srivastava, Senior Vice-President, Sales and Marketing, Hyundai Motor.

The effect of excise duty reduction has started to show by way of an increase in enquiries, although macroeconomic factors such as high fuel price and high interest rates were still keeping customer sentiments low, he added.

For Honda Cars, the whole financial year has been quite good in terms of sales, led by the Amaze sedan, the first Honda car with a diesel variant.

“This month will be better, compared with last month and January. We grew 83 per cent between April 2013 (when Amaze was launched) and February, and we look forward to seeing a similar trend,” said Jnaneswar Sen, Senior Vice-President, Marketing and Sales, Honda Cars India.

Analysts said car sales this month would mostly be driven by these three companies because of the new launches during the recent Auto Expo.

Looking ahead

“Sales are expected to continue in April and May, generally lean months in the past, as buyer sentiments are likely to to pick up in the new financial year, especially after the general elections,” said Puneet Gupta, Principal Analyst, (India Automotive) at IHS Automotive. Companies such as Mahindra & Mahindra and Tata Motors also expect to do well in the utility vehicle segment, especially during the elections, he said.

However, the fortunes of Toyota Kirloskar Motor, which is seeing a decline in sales, may drop further because of the recent lockout at its Bangalore plant over a wage dispute.

Domestic passenger car sales fell 7.59 per cent in January to 1.60 lakh units, compared with 1.73 lakh units in the corresponding month last year. However, sales grew 1.39 per cent in February to 1.60 lakh units, compared with 1.58 lakh units a year ago.

According to the SIAM (Society of Indian Automobile Manufacturers) report released early this month, domestic car sales fell 4.6 per cent between April 2013 and February this year to 16.15 lakh units, from 16.93 lakh units in the year-earlier period.

While most car companies will come out with March numbers on Tuesday, SIAM is expected to release its annual and monthly reports around April 10.

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Published on March 31, 2014
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