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Launches & stats save the blushes for Motown

Friday, 2 November 2012 - 8:37am IST | Place: Mumbai | Agency: dna

Twin factors of new launches and low base of last year have boosted auto industry sales in October.

Twin factors of new launches and low base of last year have boosted auto industry sales in October.

According to Crisil Research, the domestic passenger car sales are estimated to have grown at over 30% on-year in October 2012. A large part of this high growth has been driven by a low base of October 2011 relating to production hiccups at Maruti Suzuki.

Passenger car sales aside, the rest of the automobile industry is estimated to have declined 7-8%.

Market leader Maruti’s sales rose by a whopping 86.6% on-year to 96,002 units in October this year (51,458 units in October 2011).

“The month-on-month sales of Maruti Suzuki were disappointing as it increased just 10%, despite a good response to its newly launched Alto 800. This means, the company’s petrol cars are still under stress,” said Abhishek Banerjee, senior analyst with Asian Market Securities.

Hyundai, the second largest passenger car manufacturer, sold 35,778 units in October, up 8% on-year (33,001 units in October 2011).

Rakesh Srivastava, vice-president of marketing and sales at Hyundai, said, “The festivals brought in positive growth in domestic sales with resurgence in petrol variants. All models showed a growth, especially with strong demand for the Eon and the Elantra. In the coming months, the challenge would be to convert customer interest into sales as the general inflationary trend, high fuel prices and interest rates are still keeping the customer sentiment low.”

With slowdown in sales, industry players were expecting a subdued festival season this year. However, heavy discounting and various schemes seem to have helped them gain the required momentum during the festival period. The month of October saw festivals like Navratri and Dussehra, considered auspicious for high-value purchases.

Driven by strong demand for utility vehicles and new launches, sales of M&M’s passenger vehicles increased by 31% on-year to 26,932 units (18,756 units in October 2011). Honda Cars India registered a 46% on-year increase in domestic sales with 8,085 units (5,526). Toyota Kirloskar Motor recorded a 14% on-year growth at 12,281 units (10,762). But sales of passenger vehicles of Tata Motors declined by 16% on-year to 21,119 units (25,124).

The Society of Indian Automobile Manufacturers (SIAM) in September reduced the sales growth forecast for cars and two-wheelers for this fiscal and indicated that car sales growth can slip into the negative zone if demand continues to fall.

Analysts feel that the festival season is looking positive for the industry and this month is expected to be better “as Diwali will bring in more demand”.

“Most manufacturers have surprised with the numbers. If the industry sustains the month-on-month demand, then the growth is likely to remain in the 3-4% band,” said Banerjee.

“The sales numbers are definitely better than expected. We hope to see a sustained demand for the rest of the season,” said Yaresh Kothari, analyst with Angel Broking.

In two-wheelers, market leader Hero MotoCorp reported sales of 5,29,215 units in October, up 3.31% on-year. Honda Motorcycle and Scooter India  reported 40.64% on-year rise in total sales for October at 2,50,606 units.

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