Indian automobile industry witness slack sales again in May '13

author image CarTrade Editorial Team
Tuesday 04 June 2013, 11:43 AM

Indian auto market witnessed another month of slow sales during May this year, continuing the trend of sluggish growth over the past seven months. The prevalent slowdown in the economy is discouraging domestic buyers towards investing in new vehicles, which eventually is reflecting in the dropping sales figures recorded by the country's top passenger car makers. However, few company executive are positive that the Indian auto market would get over with recent slow phase and revive within the next few months.

Maruti Suzuki India Limited, the country's largest manufacturer of passenger cars, witnessed its sales going down by 13 per cent last month as compared to the same year-ago period. The company saw a steep 44 per cent decrease in the demand for its utility vehicles, including the best seller Ertiga Multi Purpose Vehicle (MPV), while sales of its compact car fleet, comprising Swift, Ritz and Estilo dropped by 29.4 per cent in May 2013. Further, Maruti Suzuki's top selling Swift DZire entry level sedan suffered similar fate with a 2.5 per cent decline in sales last month.

As per Joseph George, an analyst at IIFL Ltd., the contraction in demand for Maruti vehicles can be strongly attributed to the fact that popularity of diesel cars have dropped, while their petrol counterparts are flavour of the season again. The narrowing price differential between petrol and diesel fuels is a big concern for the company, as a big fraction of its sales volumes came from diesel Swift, Ritz, Ertiga and Swift DZire models. The company needs to reinvent its strategy due to the shifting trend in favour of petrol vehicles, which is hampering its sales figures in the domestic car market.

George has affirmed that the changing trend has also hurt the sales of Toyota Kirloskar Motor Private Limited and the utility vehicle manufacturer Mahindra & Mahindra Limited, both having predominantly a diesel run product portfolio. Mahindra & Mahindra succumbed to the prevalent slowdown and managed a growth of just 5 per cent in May 2013 at 22,244 units, over a brisk double digit growth till March this year. Further, Toyota Kirloskar Motor managed to sell just 10,023 units and suffered a huge drop of 35 per cent in May 2013. On the future market scenario, George was quoted as saying, “We expect the onset of the festive season in the second half to revive sales.”

Expressing his views on the drop in vehicle sales May 2013, Sandeep Singh, Deputy Managing Director (MD) and Chief Operating Officer (COO), Marketing and Commercial, Toyota Kirloskar Motor Private Limited, was quoted as saying, “The market continues to be sluggish.” He further added, “We have corrected the dealer’s inventory levels and have been able to bring it down to less than 30 days.”

Hyundai Motor India Limited, the country's largest exporter and second largest passenger car maker, witnessed not much change in its sales recorded in the domestic market last month. The South Korean auto major sold 32,102 units in May and is expecting the prevalent slowdown in the industry to end soon. Rakesh Srivastava, Senior Vice President (VP), Sales and Marketing, Hyundai Motor India Limited, has affirmed that Indian auto market would improve in the next few months, on the back of rising demand for petrol vehicles.

Evidently, launch of new models helped Honda Cars India Limited and General Motors India Private Limited in maintaining their sales figures in the country. Buoyed by the exceptional public and media response to its new Amaze entry level sedan, Honda managed to sell 11,342 units in Indian auto sector during May 2013. The Honda Amaze was launched in India in April this year and is already being cited as the company's next volume puller. General Motors India introduced its Chevrolet Sail sedan and Chevrolet Enjoy MPV this year. The two models helped the American car maker in improving its sales numbers by 40 per cent at 8,500 units from a year-ago period.

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