Passenger vehicle sales decline on adverse macro economic factors

The passenger vehicle sales in November got into a negative territory with two biggest car manufacturers Maruti Suzuki and Hyundai, which command nearly 70 per cent of the market share, reporting decline in offtake during the month in Asia’s third biggest car mart. Analysts said unfavourable base effect, and adverse macro economic conditions such as high fuel and interest costs dented the monthly sales of some manufacturers.

Sales at Maruti Suzuki, which sells one out of two car bought in the country, dipped 0.3 per cent to 1,43,890 units, down from 1,44,297 units it sold in the same month last year.

Sales of mini cars comprising Alto and WagonR fell 21.6 per cent at 29,954 units as compared to 38,204 units last year.

However, sales of compact segment models, including Swift, Celerio, Ignis, Baleno and Dzire, were up 10.8 per cent at 72,533 units as against 65,447 in November last year, the company said.

Hyundai Motor also posted marginal decline  at 0.67 per cent in its domestic sales at 43,709 units as against 44,008 units in the year-ago month. In fact, its all new Santro hatchback which accounted for 8,800 units last month drove volumes for the South Korean brand.

“Wholesale passenger vehicle dispatches has remained muted last month as dealerships focused on rationalising their inventory level given slowing demand amid cautious consumer sentiments,” Ashish Modani, vice president, corporate sector ratings at Icra told Financial Chronicle.

“Going forward, rural demand is a key monitorable to be watched closely. Given political uncertainty post general election in the coming year, customer sentiments continue to remain cautious which will weigh on the passenger vehicle growth rate in the near term,” he pointed out.

Sridhar V, auto analyst and partner at Grant Thornton India, said the much expected festival sales did not result in a bumper growth due to various macro economic factors, including fuel price increase, increased financing cost and rupee losing out to dollar.

“The decrease in crude price over November coupled with rupee gains and discounts offered should hopefully pep up the volumes of passenger cars in December which usually is a dull month,” he said.

Toyota Kirloskar Motor also reported a 15.8 per cent decline in domestic sales to 10,721 units in November as against 12,734 units in the same month last year.

“Fluctuating exchange rates, rising fuel costs and high interest rates have impacted the consumer sentiment in auto industry,” N Raja, deputy managing director at Toyota Kirloskar Motor said.