Passenger vehicle sales still sluggish in January

4th Feb 2019 12:59 pm

Even major carmakers witness slow growth due to rising fuel prices and the liquidity crunch; interim budget could provide some respite.

While the government was in the process of announcing the interim budget, vehicle manufacturers kept releasing their domestic sales numbers simultaneously revealing a rather dull performance from major car manufacturers.

The last month of any calendar year usually shows slow sales due to inventory correction. This time, though, the impact has been a little prolonged, with January 2019 numbers staying in the red for most carmakers. Clearly, the liquidity crunch and the political situation in view of the upcoming general elections have had an impact, keeping the public from splurging on vehicles.

Here's a look at the numbers released by the bigger names in the Indian automotive market.

MARUTI SUZUKI INDIA

The bellwether of the Indian PV sector reported a flat growth of 0.2 percent in January 2019 with a total registered domestic sales of 1,39,440 units. Its entry-level Alto and Wagon R duo went home to 33,408 buyers and remained absolutely flat in sales (January 2018: 33,316). Maruti launched the latest generation of the Wagon R on January 23 and anticipates further growth from the popular hatchback known to have garnered over 2.2 million units in sales for the company since its launch in 1999.

Sales of its compact cars – including the Swift, Celerio, Ignis, Baleno and the Dzire – dipped by 3.5 percent to a total of 65,523 units (January 2018: 67,868). The brand's popular Baleno hatchback also received a mid-life refresh. The car sold over 5,00,000 units for the Japanese carmaker in India and now gets a host of features that have become standard on its lower variants in its facelifted avatar.

Meanwhile, Ciaz sales slumped a significant 42 percent to settle at 2,934 units (January 2018: 5,062), Maruti’s quartet of UVs – the S-Cross, Vitara Brezza, Ertiga and Gypsy – clocked 22,430 units and registered a growth of 8.4 percent (January 2018: 20,693). The Omni and the Eeco still witness the highest year-on-year growth rate of 23.6 percent with sales of 15,145 units (January 2018: 12,250).

HYUNDAI MOTOR INDIA

Being the No. 2 carmaker by sales volumes, Hyundai Motor India sales also recorded flat growth in January, touching 45,803 units (January 201: 45,508). The company did resurrect the Santro brand in October last year; however, its regular models including the Grand i10, Elite i20 and Creta are seemingly doing better than what it had expected from the once-popular entry-level hatchback marque in the country.

MAHINDRA

Rising fuel prices and the liquidity crunch have led the home-grown UV specialist to dole out flat numbers too. The company sold a total of 23,872 units in the PV space in the month (January 2018: 23,686).

Commenting on the manufacturer's performance, Rajan Wadhera, president, Automotive Sector, Mahindra, said, “The first month of the new calendar year continues to be on an overall growth path. There is buoyancy in rural growth, commodity costs are levelling, fuel prices are coming down and we see improvement in Forex movement, which in turn will drive positive customer sentiment. Having successfully established the Marazzo and Alturas brands and with the upcoming launch of our new compact SUV, the XUV300, we are positive on our outlook”.

HONDA CARS INDIA

Japanese carmaker Honda Cars India has emerged as the sole manufacturer to observe what can be construed as a reasonable growth rate. The company registered cumulative domestic sales of 18,261 units in January 2019 as against 14,838 units sold in January 2018 – a notable 23 percent growth, considering this weak financial environment.

Commenting on the results, Rajesh Goel, senior vice-president and director, Sales and Marketing, Honda Cars India, said, “Honda Cars India’s sales efforts, backed by excellent support from dealers, helped us achieve the sales growth of 23 percent in January. Responding to the tepid market situation with extensive marketing efforts including on-ground activations focusing on Tier II and Tier III markets drove sales of all Honda models in the month.”

“With additional benefits in Direct Taxes announced in the Interim Budget, we expect the consumer sentiment to improve in the coming months,” he added.

TATA MOTORS

Like other PV players in the Indian market, Tata Motors was also affected by low customer sentiment caused by unavailability of retail finance and the liquidity crunch in the market. Its domestic sales witnessed an 11 percent drop this month – 17,826 units, as compared with 20,055 units sold last year. The cumulative sales in the domestic market for the fiscal (April 2018 to January 2019) were at 1,74,223 units – a growth of 17 percent as compared to the 1,49,284 units sold in the same period, last fiscal. The recently launched Harrier has received a good response in the Indian market and the company is expecting to witness good volumes in coming months as the production ramps up.

According to Mayank Pareek, president, Passenger Vehicles Business Unit, Tata Motors, “January 2019 has been a rather sluggish period for the entire auto industry and has resulted in muted consumer sentiment. Having said that, we are positive to bounce back in the months to come on the back of our new-generation products. This month has witnessed our UV segment grow by 3 percent. With the ramp-up in the Harrier's production we are expecting to continue this momentum. The Harrier has been very well received by our consumers. We will continue to strive towards driving volumes and increasing our market share as part of our ongoing turnaround journey.”

TOYOTA KIRLOSKAR MOTOR

Also a primarily UV player, Toyota Kirloskar Motor registered overall domestic sales of 12,067 units in January 2019 and like other manufacturers, remained flat in performance (January 2018: 12,351).

Commenting on the brand's sales performance, N Raja, deputy managing director, Toyota Kirloskar Motor, said, “With the closure of special offers/year-end schemes, the buying sentiment has witnessed a dip this month. The tightening of vehicle financing availability has also added to the challenges in the market.”

The Interim Budget for FY2019-20 has declared income-tax exemption for the lower- and middle-class income groups, so the Indian PV industry may now see some respite and demand a comeback into the market from the entry-level segment. Moreover, with the recently implemented mandate requiring vehicles to upgrade and meet safety norms, manufacturers are looking forward to reignite the excitement with facelifts and new model launches through the coming year. While FY2018-19 is almost at the verge of closure, all hopes now lie on the next fiscal to bring back some positivity to a rather promising and important sector in the country’s economic scenario.

MAYANK DHINGRA

Company-wise sales January 2019
Jan 2019 (units)Jan 2018 (units)Growth (%)
Maruti Suzuki1,39,4401,39,1890.20%
Hyundai45,80345,5080.64%
Mahindra23,87223,6860.79%
Honda18.26114,83823%
Tata Motors17,82620,055-11.11%
Toyota12,06712,351-2.20%
Total2,57,2692,55,6270.64%

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