Rising interest rates and a general lack of buying sentiment impacted compact cars, entry-level sedans and bikes the most last quarter, and pulled down the overall domestic sales number.
Tally skids 5.47% as lack of buying interest hits manufacturers, says Siam
NEW DELHI: Rising interest rates and a general lack of buying sentiment impacted compact cars, entry-level sedans and bikes the most last quarter, and pulled down the overall domestic sales number. Industry-wide, sales declined by 5.47% to 22,75,595 units from 24,07,336 units in the corresponding quarter last year.
But, while overall domestic sales suffered, exports grew by almost 17% to 289,921 units.
Analysts see interest rate hikes and lack of buying sentiment continuing to impact sales this quarter, too.
According to data release by the Society of Indian Automobile Manufacturers (Siam), three of the 11 well-known compact car brands witnessed declining sales in the domestic market between the April and June - Maruti’s M800 was down 2,306 units at 17,994 units, while the combined sales of Santro and Getz fell by 1,050 units. Interestingly, the overall segment was saved from disgrace by other brands from the Maruti stable - Alto, WagonR, Zen and Swift - with combined sales rising by 18,963 units to 110,413 units. Tata Motors’ Indica registered an increase of 1,426 units while General Motors rode the success of its new launch, Chevy Sprak, which sold 7,341 units during the quarter.
But, while domestic sales saw overall growth last quarter, exports presented a mixed bag. Only Hyundai Motor India and Maruti reported increased exports, with all other companies (even Maruti’s M 800) registering a decline.
The trend of declining sales was more pronounced in the entry-level sedan segment, with as many as 15 of the 19 brands in the category registering sales degrowth. The winners? Only Maruti Udyog, the latest kid on the block, with its Sx4 and the Mahindra Renault with its Logan (again a new product). Stalwarts such as Honda City, Hyundai’s Accent and Verna, and Tatas’ Indigo and Indigo Marina — all suffered during the June quarter.
Honda City saw the steepest sales decline at 2,154 units to close the quarter at 8,409 units, whereas Ford’s portfolio of Ikon, Fusion and Fiesta lost 963 units to close at 8,195 units.
But, how is it that despite carmakers crying hoarse about rising finance costs and the consequent sales slowdown, the Siam data shows that car sales actually logged a healthy 12.67% growth in the domestic market during the quarter?
A closer look reveals that the bulk of this growth has come from market leader Maruti Udyog and smaller players such as General Motors and Renault Mahindra riding the tide on new launches (Chevy Spark and Logan, respectively).
Maruti Udyog logged an impressive 17.14% growth in domestic sales and 15.65% export growth during the June quarter.
However, second-largest carmaker Tata Motors saw a flat quarter with sales up only by 0.43% in the domestic market even as exports logged 5.46% growth.
The quarter wasn’t any the more memorable for Hyundai Motor either, with domestic sales increasing by a mere 1.17% and export growth capped at 6%. However, riding on new launches, General Motors and Renault Mahindra registered robust sales growth. GM logged a whopping 40.04% growth in the three-month period on the strength of Chevy Spark.
According to Siam, altogether 2,75,147 cars were sold in the domestic market during the three-month period against 2,44,212 in the same period last year. However, car exports suffered, falling 8.13% to 45,138 units against 49,132 units in the same quarter last year.
Total car sales (domestic plus exports) logged only 9.18% growth against the high double digits seen till a few quarters back.
In two-wheelers, on the other hand, market leader Hero Honda saw domestic sales dip by 2.69% (781,404 units) even as exports fell by a whopping 27.78% (21,449 units).
Number two in the two-wheeler pecking order, Bajaj Auto, registered a 23.63% fall in domestic sales (385,700 units), but more than made it up with exports surging by almost 61% (114,555 units).
The steepest fall in domestic sales was seen at Yamaha Motor India, with sales languishing at 25,712 units - a fall of almost 59%. Exports, however, logged over 17% growth at 16,627 units.
Overall, the two-wheeler segment saw domestic sales sliding by 5.47% to 2,276,595 units even as exports grew by almost 17% to 289,921 units.
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