Mumbai: New model launches and discounts on petrol models lifted the sales of most car makers in November, reversing the falling trend in sales over the past few months. Market leader Maruti Suzuki India Ltd, however, reported a drop in sales for the sixth consecutive month after labour trouble at its Manesar plant in northern India hit production.
Auto makers are cautious about the outlook for the industry, expecting high borrowing costs and uncertainty over fuel prices to crimp demand in the months ahead. Maruti Suzuki and other car makers are also considering price hikes to offset the impact of a depreciating rupee that makes component imports more expensive.
“Our immediate outlook on the market is not too bright as interest rates and fuel prices are unlikely to soften in the foreseeable future,” said Arvind Saxena, director of marketing and sales at Hyundai Motor India Ltd.
Maruti Suzuki sold 82,870 cars in November, a decline of 18% from a year ago. Although production is being restored to normal levels, the company does not see any volume growth this year.
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“We do not expect the market to revive anytime soon. We are trying to match our last year’s figures,” said R.C. Bhargava, chairman of Maruti Suzuki.
Sales at Hyundai Motor rose 10% to 35,000 units, boosted by the launch of the company’s compact car Eon in October and the diesel variant in May of the new Verna, which has a waiting period of six-eight months.
Driven by the Nano small car, albeit on a low base, Tata Motors Ltd, the third largest passenger car maker, saw sales jump 81% to 27,737 units. It sold 6,401 units of the Nano against 500 last year. Launches of new variants of the Indica and competitive pricing also propped up overall sales.
Mahindra and Mahindra Ltd, the market leader in utility vehicles, kept up the growth momentum of the previous months. It sold 17,813 utility vehicles and cars during November, up 44% over a year ago.
The launch of diesel variants of the Etios sedan and Liva hatchback in September pushed sales of Toyota Kirloskar Motor India Pvt. Ltd up 266% to 13,956 units.
Sales would have been higher, but for constraints in the production of the Innova and the Fortuner models, said Sandeep Singh, deputy managing director at Toyota Kirloskar. The production of these models has been hit by floods in Thailand, from where the company imports parts and aggregates.
Meanwhile, Honda Siel Cars India Ltd sold only 1,982 units against 4,070 last year, after production of its models in Thailand was severely affected by the floods.
Ford India Pvt. Ltd, Volkswagen India Pvt. Ltd and Nissan Motor India Pvt. Ltd also saw sales expand, although at a slower pace compared with a year ago.
Low inventory levels with dealers pushed up sales in November, said analysts. Auto firms in India report despatches to the dealers and not purchases by buyers.
With the festive season coming to an end, companies have started fresh despatches, said Yaresh Kothari, an analyst at domestic brokerage firm Angel Broking Ltd. The numbers have also been helped by the launch of new models, diesel ones in particular, he added.
Among the two-wheeler makers, Honda Motorcycle and Scooter India Pvt. Ltd unseated TVS Motor Co. Ltd as the country’s third largest two-wheeler maker by sales.
TVS sold 150,406 units, a growth of 8%, while Honda reported a 54% rise in sales to 199,154 units. Sales at India Yamaha Motor Pvt. Ltd gained 29.2% to 39,162 units from a year ago.
Sales at Hero MotoCorp continued to be robust, as the company sold a record 5,36,000 two wheelers, up 27% from a year ago. Bajaj Auto did not release the sales numbers on Thursday.
Two-wheeler sales are expected to moderate to a growth pace of 12% to 15% from 25% plus a year ago, according to Crisil Research, a unit of rating company Crisil Ltd.
Amrit Raj in New Delhi contributed to the story.
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