The onset of the 2019 fiscal was upbeat for most automakers in India, as they recorded a growth in passenger vehicles sales in April 2018. Things look good at the outset – consumer sentiment is up, forecast predicts a normal monsoon and there is an uptick in rural India demand. However, the high fuel prices could weigh heavy on overall PV demand.
As of May 2, 2018, petrol prices stand at Rs 82.48 per litre and diesel at Rs 70.20 per litre (Mumbai prices) and consequently burn a hole in motorists’ wallets. For India (which is the world’s third-largest oil importer) the sharp spike in global crude oil prices over the past fortnight will have an adverse impact on the automobile industry, albeit not immediately.
For the PV segment, the urban citizens' growing preference for shared mobility is already having an impact on sales; most metros have reported a decline in the same. However, automakers hope to make up the difference (and more) from new sales in Tier-3 and Tier-4 cities. Here's how the PV segment fared in April, from the perspective of the country's major manufacturers:
The country’s leading carmaker registered cumulative sales of 1,63,434 units in April 2018 – its best performance ever in a month, posting notable growth of 13.4 percent (April 2017: 1,44,492). The significant volumes imply that the bellwether of the Indian passenger vehicle segment sold an average of 5,447 units every day.
This growth, however, could primarily be attributed to the surging sales seen in Maruti's range of compact cars, which include the Swift, the Ignis, the Celerio, the Baleno and the Dzire. The collective sales of these models stood at 83,834 units – a substantial jump of 31.8 percent over the year-ago sales of 63,584 units.
The recently introduced new Swift hatchback is the one leading the charge, having received a strong market response and selling 17,291 units in its maiden month of February (February 2017: 12,328 / +40 percent). Its compact sedan sibling, the Dzire, was launched in May 2017 and is also one of the company's major growth drivers in the compact segment. Contribution from Maruti's UV portfolio (which comprises of the Gypsy, the Ertiga, the Vitara Brezza and the S-cross) was marginal as sales were flat at 20,804 units (April 2017: 20,638 units).
The No 2 player by sales volumes, Hyundai Motor India, sold 46,735 units in April, growing 4.41 percent (April 2017: 44,758). The Korean carmaker has been seeing consistent demand for its two hatchbacks – the Grand i10 and the i20 – as well as for its Hyundai Creta SUV. All of these cars have been making their way into the 'Top 10 best-selling PVs’ list, month-on-month over the last fiscal. While the Creta has surpassed sales of 2,50,000 units in the domestic market since its launch in March 2015, the company recently introduced the updated avatar of the i20, giving it a slew of cosmetic tweaks and a new CVT option in its petrol avatar.
The home-grown carmaker sold 17,235 units last month – a substantial increment of 34 percent over year-ago sales of 12,827 units. While it saw continued demand for the Tiago hatchback, Tata Motors also witnessed a three-fold growth in UV sales, due to the strong performance of the Nexon compact SUV. In FY2018 (barely within seven months of its launch) the snazzy Nexon has sold a total of 27,747 units, accounting for 53.47 percent of Tata Motors' total UV sales of 51,891 units. The company is now set to introduce AMT variants in both, the petrol and diesel, versions of the crossover.
Mahindra & Mahindra
UV specialist Mahindra & Mahindra (M&M) recorded good growth. Its PV sales notched 21,927 units, up 13 percent (April 2017: 19,391). Rajan Wadhera, president, Automotive Sector, M&M, said the company has received a good response to the recently launched XUV500 facelift.
Toyota Kirloskar Motor
The Bangalore-based carmaker’s FY2019 has begun with sales of 13,037 units, marking a flat growth (April 2017: 12,964). While the Innova Crysta MPV and the Fortuner SUV have been its top grossers month-on-month, the company ventured into the C-segment space in India for the first time and introduced its new Yaris sedan.
Honda started off the new fiscal with an average performance, selling 9,143 units – down a substantial 37 percent (April 2017: 14,480). The primary reason for the significant drop in sales is zero dealer dispatches of its Amaze compact sedan, last month. The car is due for a generational change and the second-generation model is to be launched on May 16.
According to Rajesh Goel, SVP and director, Sales & Marketing, Honda Cars India, “We are preparing for the launch of the all-new Amaze this month and did not have stocks of the outgoing Amaze. Besides, the City and WR-V, which were launched last year, had witnessed a new model sales spurt, around this time. Both these reasons are reflected in lower wholesales in April, this year, as compared to last year.”
While the City sedan was the best-seller for Honda last month with 3,366 units, the Jazz-based WR-V crossover went home to 2,949 buyers and the Jazz, itself sold 1,747 units in the month. It would be interesting to see the performance of the City in coming months, as arch rival Toyota Kirloskar Motor has just introduced its competent Yaris sedan, pitched directly against Honda's segment-best-seller.
The American carmaker has reported domestic market sales of 7,428 units, remaining consistent with its performance in April 2017, when it sold 7,618 vehicles.
Company president and managing director Anurag Mehrotra expressed concerns over rising inflation and fuel rates. “Increasing inflation trajectory which might weigh on customers' access and cost to credit, coupled with increasing crude prices, could lead to passenger vehicle industry growing at low single digits, so far, this year,” he said.
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