Car sales continued to decline in March, despite the heavy year-end discounts and cut in prices. However, new launches have helped drive sales for some manufacturers such as Hyundai Motor India, Honda Cars and Ford India during the month.
Leading car companies including Maruti Suzuki, Mahindra and Mahindra (M&M) and Toyota Kirloskar Motor (TKM) witnessed fall in sales as market continued to remain sluggish on account of increasing fuel prices and high vehicle interest rates.
Of the total number of dispatches reported by various carmakers on Tuesday, car sales witnessed a decline of 1.93% in March, compared to same period last year.
Sales of Maruti Suzuki – the country's biggest carmaker, saw a 5.2% dip in domestic sales during the month as it sold 102,269 units as against 107,890 units in March 2013. Sales of mini segment cars, including M800, Alto, A-Star and WagonR, declined by 11% to 40,085 units as compared to 45,047 units in the year-ago month, the company said in a statement.
Passenger vehicle sales of M&M – the biggest utility vehicle maker, dropped 9% in March compared to same month last year. Pravin Shah, chief executive, automotive division, M&M said, "Post the reduction in the excise duty across all segments, the auto industry has seen the level of inquiry going up, but has not witnessed any major surge in sales. We do hope that the sentiments improve and change post the national elections, leading to an increase in demand as well."
A lock-out at TKM's plant last month led to a decline in dispatches by almost 57%.
According to dealers, number of bookings and inquiries increased during the month in some parts of the regions, on account of festivals like Gudi Padwa and reduction in car prices. The manufacturers announced the reduction in prices after the government decided to cut excise duties on cars and sports utility vehicles between 4-6%.
Second largest car manufacturer - Hyundai Motor India, on the other hand, registered a 3.4% rise in sales in the domestic market on the back of new launches. Rakesh Srivastava, senior VP- sales and marketing, Hyundai Motor India, said, "Post the reduction of excise duty and strong performance in compact segment, Hyundai registered March sales of 35,003 unit, indicating a build-up of positive momentum."
Tata Motors bounced back into positive lane after witnessing a decline in sales for many months, with dispatches of its passenger vehicles rising by 2.37% in March. Companies like Honda Cars India, Nissan Motor India and Ford India also registered growth, clocking sales of 83%, 230% and 20.58%, respectively on the back of new launches.
"The sluggishness continues in the market, while we expect things to improve in the second half of the year. However the quantum of decline for some manufacturers is not as high as what it use to be earlier.
Hence, expect market sentiment to improve, but recovery will still take some time," said Yaresh Kothari, analyst with Angel Broking.