Car sales lose momentum in June 2015

After posting upbeat numbers month-on-month in April and May, the month of June saw a dip in car sales due to weak buyer sentiment in anticipation of weak rainfall coupled with a weak demand in the rural areas. Moreover, base effect as a result of companies pushing dispatches in the same month last year, as the government moved to end excise benefits, also in some measure weighed on sales last month. Sales volumes rose nearly 16% and 5% respectively in April and May.

Of the carmakers who released their sales numbers for June 2015, most of them reported a year-on-year decline, while some reported flat sales or slightly improved figures.

The country’s largest carmaker Maruti Suzuki posted a 1.8% year-on-year rise to 1,14,756 units in June with domestic sales accounting for 1,02,626 units, up 1.6% year-on-year. In the first quarter (April-June) the automaker registered sales (including exports) of 3,41,329 units, up 13.8 percent over the same period last year.

In the entry level-segment, the Alto and Wagon R sold 34,336 units, down 27.9% indicating a decline in sales from the rural market and Tier 2 and 3 cities. Among the compact cars, sales for the Swift, Celerio, Ritz and Dzire clocked remained upbeat in June at 45,701 units, up 24.4% on year. Maruti’s mid-size sedan segment, the Ciaz, sold around 3,700 units, crossing total sales of 45,000 units since its launch in September 2014.

The weak buyer sentiment came about as interest rates weren’t cut. However, demand is likely to improve in the coming months due to a slew of launches by automakers. Although the present environment is challenging for car companies to introduce new cars in, sales are likely to get a boost if the product goes down well with the Indian buyers.

Hyundai Motors, the second-largest carmaker registered domestic sales of 36,300 units in June, up 8.3% from last year. Cumulative sales, however, grew only 3.1% to 52,062 units, dragged down by weak exports.

"In a market bearing low traction, consistent demand of Elite i20, Grand, Xcent led to Hyundai’s volumes growing by 8.3% and with the upcoming launch of global SUV Creta, we are confident of sustained growth,"  Rakesh Srivastava, Senior Vice President, Sales and Marketing, HMIL said. The automaker is set to launch its much-awaited SUV, the Hyundai Creta in India on July 21, 2015.  The car will rival the Renault Duster, Mahindra Scorpio and the upcoming Maruti S-Cross.

Honda Cars India registered monthly domestic sales of 18,380 units in June, up 12.65% from the corresponding month last year. Honda managed to put up a double-digit growth in June despite grappling with production issues with some of its models. The Honda City, for instance, is facing delay in manufacturing and some of its variants have a waiting period of 2-4 months. Jnaneswar Sen, Senior Vice President, Marketing and Sales said that the company will be able to expand its footprint further in India with the launch of its upcoming new model, the Jazz. The Honda Jazz will be launched on July 8 and will rival Hyundai’s Elite i20, which has had a great run so far in the premium hatchback segment.