Car demand was slow in July as high fuel prices continued to hurt petrol car sales.
Car demand was slow in July as high fuel prices continued to hurt petrol car sales.
According to industry estimates, the growth of petrol cars year-to-date declined 26%, but diesel cars continued with their strong show.
The two top car makers, Maruti Suzuki and Hyundai Motor India, saw a moderate growth in July, which was driven by diesel cars.
Tata Motors and Mahindra & Mahindra surprised with a strong growth in passenger vehicles, mainly on the back of diesel portfolios.
The industry is expected to slow down further in the coming months if production continues to remain halted at Maruti Suzuki’s plant in Manesar.
Maruti Suzuki sold 71,024 units in July this year in the domestic market compared to 66,504 units in July 2011, a growth of 6.8%. Growth was primarily driven by the Swift and the Dzire segments, which grew 73% and 277%, respectively. The mini segment (M800, Alto, A-Star, WagonR) continued to remain in negative due to low demand for petrol cars.
“Maruti numbers were a bit disappointing considering the low base of last year. The impact of slowing demand of petrol cars could be more severe than the current lock-out situation the company is facing,” said Abhishek Banerjee, senior analyst with Asian Market Securities. Hyundai recorded sales of 27,585 units in the domestic market compared to 25,642 units in the year-ago period, registering a growth of 7.58%.
“The overall market demand is suppressed due to general inflationary trend, high fuel prices and interest rates. Unless any major triggers get activated, market sentiment is not expected to improve very much,” Rakesh Srivastava, vice-president (national sales), Hyundai India, said. Surprise came from Tata Motors as it sold 26,240 units of passenger vehicles in July this year, registering a growth of 53% over last year. Sales of all its vehicles revived, including Nano, Indica range and sports utility vehicle range. “The company would have partially gained from Maruti issue and the growing demand towards diesel vehicles,” said an analyst.
Passenger vehicles of M&M registered a growth of 27% as it sold 22,011 units in July 2012 compared to 17,312 units last year.
On the other hand, sales of other major players such as Toyota Kirloskar Motor, Ford India moderated despite having a strong diesel portfolio.
Toyota grew 7% in July 2012 as it sold 14,574 units. Sales of Ford India declined to 6,236 units in July this year compared to 7,504 vehicles last year. Nissan India sold 3,481 units in July 2012 compared to 1,593 units a year ago, growing 118.5% on the back of sedan Sunny.
Sales of two-wheelers were also under stress as companies worked on clearing inventories. Sales of TVS Motors declined to 140,822 units in July 2012 as against 160,348 units in July 2011. Domestic volume of Honda Motorcycle and Scooter India rose 61% on the back of launch of new motorcycle – Dream Yuga – and strong scooter demand.
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