February passenger vehicle sales in slow lane

After a slow start in January, India’s passenger vehicle sales in February continued to remain tepid due to moderate consumer demand. Carmakers said the Jat agitation in North India also affected the production and transportation of vehicles.

While Honda, Tata and Toyota and Ford saw a decline in sales, Mahindra, Hyundai, and Renault bucked the trend and posted a growth. Overall volumes were weighed down by flat growth from the country’s largest carmaker Maruti Suzuki.

Besides, sales are likely to come under pressure in the near term due to additional taxes of up to 5 percent being imposed on passenger vehicles in the Union Budget 2016-17.

Domestic sales of Maruti Suzuki India were affected by the agitation in Haryana. The carmaker had to suspend operations at its facilities from February 20-23, since supply of certain components was disrupted following the agitation. Maruti sold a total of 1,08,115 units in February 2016, nearly flat as against 1,07,892 units during the same month last year. Total production loss was to the tune of 10,000 units, according to the carmaker.

Sales of the company’s frontrunners Alto and Wagon R declined 11.2 percent to 35,495 units, while compact car models such as the Swift hatch, Dzire sedan and Celerio posted flat growth. Sales of its utility vehicles continued to be upbeat, however, with the Gypsy, Ertiga and S-Cross together bringing in a volume of 8,484 units, up 44.7 percent year-on-year.

Hyundai registered domestic sales of 40,716 units in February 2016, up 9.1 percent from 37,305 units last year. The carmaker said that it faced logistic challenges for transportation of its vehicles to North India and loss of many business days of dealership operations across Haryana.

Mahindra’s passenger vehicles sales stood at 23,718 units in February 2016, up 26 percent as against 18,817 units last year on the back of upbeat response for the KUV100. “The imposition of an infrastructure cess of 1 percent to 4 percent for passenger vehicles, as announced in the Union Budget, would increase prices of automotive products immediately. An increasing number of duties levied on automobiles is a cause of concern and we see the need for GST sooner than later,” Pravin Shah, president and chief executive (Automotive), M&M Ltd said.

At Honda Cars India, domestic sales declined 6.5 percent to 17,135 units as against 18,331 units last year. Passenger vehicles sales at Tata Motors stood at 10,962 units, down 20 percent compared to 13,767 units last year.

Toyota Kirloskar Motor registered sales of 10,312 units in the domestic market last month, a degrowth of 12.62 percent year-on-year. The carmaker said sales of the Camry have doubled when compared to February 2015, with almost 90 percent belonging to the hybrid variant.

The ban on registration of vehicles having engine capacities of over 2,000cc in Delhi and NCR regions continues to affect Toyota’s sales with the area constituting 8-10 percent of its market share, N Raja, director and senior vice-president (Sales & Marketing), said. “…the unrest in Haryana has further impacted our business in that region with dealerships being closed for more than a week,” he added.

Interestingly, Tata Motors is working on re-engineering its 2.0-litre engines affected by the ban, much like Mahindra, so that the vehicles with those engines can go on sale again.

Renault India saw monthly domestic volumes expand 158 percent to 8,834 units last month as against 3,419 units last year due to continued buoyant demand for the Kwid hatchback. Bookings for the Kwid have crossed the 1,00,000 mark since its launch.

Ford India sold 5,483 vehicles in February 2016, down nearly 8 percent as against 5,959 units in the same month last year.