Post excise duty cut, car sales yet to take off

    Sales numbers reveal lukewarm customer response to slashed prices.

    Published On Mar 07, 2014 06:53:00 PM

    27,865 Views

    Post excise duty cut, car sales yet to take off

    The combination of high interest rates, changing fuel prices and a general lethargy in the market is still keeping consumers from fully opening up their wallets and making purchase decisions.

    While the 4 percent excise duty cut on small and midsized cars and 6 percent on SUVs in February brought cheer to all OEMs, February 2014 sales numbers reveal that consumers are yet to warm up to the downward price revisions. The combination of high interest rates, changing fuel prices and a general lethargy in the market is still keeping consumers from fully opening up their wallets and making purchase decisions. 

    Maruti Suzuki India, the country’s number one carmaker, recorded a 1.84 percent increase in its domestic sales in February 2014, selling a total of 99,758 units. The recently launched Celerio hatchback is good news for the company, given that the biggest growth has been in the four-car Swift-Estilo-Ritz-Celerio combine that sold 28,672 units, up 19.40 percent. Given that this category for Maruti has been logging flat or negative growth since November 2013, clearly the Celerio has provided the winning touch. With over 20,000 bookings in hands, half of them for the AMT-equipped Celerio, Maruti should be logging smart gains over the next few months. Maruti’s entry level pack (M800, Alto, A-star and Wagon R) sold a total of 37,342 units, down 9.6 percent, indicating that demand for the Celerio has impacted this segment. Meanwhile, sales of the popular midsize Dzire sedan remained flat at 18,353 units, up 0.2 percent. The SX4 sold 228 units in February 2014 as against 215 units in February 2013. Maruti’s UV range (Ertiga, Gypsy and Grand Vitara) took a hit, down 12.2 percent with sales of 5,231 units.

    Also read: New car launches this March

    Meanwhile, number two player, Hyundai Motor India registered flat sales of 34,005 units in February 2014, up 0.01 percent. Rakesh Srivastava, senior VP, (sales and marketing), said, "After the reduction in excise duty, enquiry inflow has increased. It is expected that this will lead towards creation of a positive momentum."

     

    Mahindra & Mahindra (M&M) sold a total of 19,308 units in February 2014, down 17.56 percent. 

    Tata Motors sold 11,325 passenger cars during the month, a growth of 6.71 percent. Sales of the Nano/ Indica/ Indigo range in February 2014 comprised 9,026 units while the Sumo/ Safari/ Aria/ Venture range sold 2,299 units. Nevertheless, compared to Tata’s sales tally of 40,961 in February 2012, the numbers are majorly down for the company, seen over two years.

    Toyota Kirloskar Motor (TKM) sold 10,100 units in February 2014, down 21 percent. 

    Also read: New car discounts this month

    Honda Cars India, which sold 14,543 units in the month, posted handsome growth of 123 percent. The recently launched fourth-generation City has received a strong market response and the sedan sold 7,213 units. Meanwhile, the Amaze sedan continues to pull in buyers and sold 6,030 units. The other sellers were the Brio hatchback (1,235 units) and the CR-V SUV (65 units). The company recently inaugurated its second car manufacturing plant at Tapukara in Rajasthan.

    Ford India’s sales saw 51 percent growth with 6,799 cars going home to news owners. “The recent reductions in excise duty should provide a positive message to customers,” said Vinay Piparsania, executive director of marketing sales and service. 

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