Car mart slips further in April despite discounts
May 02 2014 , Pune
Maruti Suzuki, the country’s largest car manufacturer, on Thursday reported an 11.4 per cent drop in April sales, while Hyundai Motor India, the second biggest, saw an 11.8 per cent decline.
Ford India bucked the trend, as did Honda Cars, clocking massive volume growth in a fiercely competitive market.
Ford India sales jumped a whopping 82.9 per cent in April to 13,297 units from 7,270, of which 6,651 units were sold in the domestic market — a growth of 66.15 per cent — and 6,646 units were shipped overseas.
“Despite the ongoing business challenges faced by the Indian automotive industry, Ford India sales have remained steady in April,” said Vinay Piparsania, executive director of marketing, sales and service at Ford India.
Piparsania hoped that the next government would make progressive policy interventions to energise the Indian automotive sector.
Honda Cars India, a premium carmaker in India, clocked 30 per cent growth in domestic sales, raising volumes to 11,040 units in the domestic market from 8,488 a year ago.
“We have started the new financial year on a positive note and would like to thank our customers for the fantastic response to the all new Honda City,” said Jnaneswar Sen, senior vice-president for marketing & sales at Honda Cars India.
Sluggishness persisted elsewhere. Passenger vehicle sales dropped 6.05 per cent in the last financial year, a first in 13 years for Asia’s second biggest economy. And sales data announced for the first month of the new financial year only confirmed that the worst was not over for the struggling auto industry.
Mahindra and Mahindra, India’s largest utility vehicle maker, reported 13 per cent lesser sales; General Motors India saw a 35.30 per cent year-on-year drop and Toyota Kirloskar Motor reported a 16 per cent decline. Tata Motors, India’s largest automaker by volumes, did not release April sales data till the time of going to press.
The government reduced excise duty on cars by between 4 per cent and 6 per cent in the February interim budget, but that has not halted the slide in last three months.
Industry experts blamed it on muted demand, high fuel prices and weak market conditions due to a sluggish economy plagued by high interest rates.
“Customer sentiment continues to be negative even with price reduction on account of the excise duty cut and other market promotion schemes,” said P Balendran, vice-president at General Motors India.
Maruti sold 86,196 units in April against 97,302 a year ago. Its domestic sales declined by 12.6 per cent to 79,119 units from 90,523 units. April sales were 24 per cent lower from the March figure of 1,13,350 units.
The high-margin Dzire saw 17.7 per cent drop in sales for the second straight month, indicating that rival Honda’s Amaze and Hyundai’s Xcent were catching up fast.
The market leader sold 25 per cent fewer cars in the mini-segment comprising Alto, A-Star and WagonR. Sales of utility vehicle Ertiga fell by 6 per cent and that of vans declined nearly 4 per cent. But compact models Swift, Estilo, Ritz and Celerio sold nearly 10 per cent more year-on-year.
Hyundai Motor India sold 50,222 units in April down from the 56,953 units sold in the year-ago period. But the company said domestic sales grew 8.8 per cent to 35,248 units from 32,403, but exports crashed 39 per cent to 14,974 units.
Rakesh Srivastava, senior vice-president for sales and marketing at Hyundai Motor India, said sedan and utility vehicles led the growth across geographies. He said new vehicles such as Xcent, Grand and Santa Fe saw good demand.
M&M sold 18,148 passenger vehicles in April against 20,748 units in the year-ago period, while domestic sales fell 15 per cent to 34,107 units. “It is unfortunate that the auto industry has not seen an upturn over the last couple of months in spite of an excise duty reduction,” said Pravin Shah, chief executive for automotive division at M&M.
Shah hoped improved sentiment after the general elections would lead to a better economic situation and increased demand for cars.
GM India’s Balendran said going by the market scenario, the company expected the challenging times to continue for sometime. “The buoyancy is missing in the market and we don’t see any upturn in the market before the new government assumes office,” he said.
Toyota Kirloskar sold 8,328 cars in April against 10,456 units in the year-ago period and exported 766 units of the Etios series. In the domestic market, it sold 7,562 units during compared with 9,007 units a year ago.
“We resumed normal production on April 22 and carried out limited operations until then,” N Raja, director and senior vice-president, sales and marketing, told Financial Chronicle.