BackAuto sales switch lanes after festive rush
Growth slows from the previous month, indicating a correction in inventory levels soon after the festive season
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Mumbai: Most auto makers reported brisk sales in November, but the pace of growth slowed from the previous month, indicating a correction in inventory levels after the festive season ended.
Sales growth wasn’t as broad-based as in October, and after a massive stock push, two-wheeler firms also reported a sales decline in November.
Car market leader Maruti Suzuki India Ltd sold 110,599 units in November, up 10.6% from a year ago. The newly launched compact car Baleno drove the sales increase.
Sales of Maruti Suzuki’s entry-level models such as the Wagon R and Alto skidded 4%, suggesting that some of the Baleno sales might have come at their cost. In October, Maruti Suzuki’s car sales had surged 24%.
Even so, the sales are in line with the company’s target of double-digit growth in the year to next March, said R.S. Kalsi, executive director of marketing and sales at Maruti Suzuki.
“During November, we continued our focus on retail sales in the festive season. We were able to post a growth of over 22% during this year’s festive season versus the previous year," said Kalsi.
“Our launches, including Baleno, Ciaz Hybrid SHVS and Ertiga Hybrid SHVS received a strong positive response. Sales are likely to remain range-bound in single digits for the next couple of months as companies dispatch less in the forthcoming months to liquidate unsold stock at the dealerships and buyers postpone purchase for the new calendar year," he added.
Auto firms in India report dispatches to dealers and not sales to buyers. Ahead of the October-November festive season, car and two-wheeler makers aggressively pushed sales.
“The festive season was significant for both two-wheelers and cars. We expect sales to be under pressure for motorcycles owing to weak rural demand," said Subrata Ray, an analyst at ICRA Ltd.
Ray expects passenger vehicles sales to increase 5-6% and two-wheeler sales to advance 2-4% in the year to March.
India’s economic growth accelerated to 7.4% in the second quarter of the current fiscal year, riding on a spike in industrial activity and a pickup in investment demand. But sectoral data showed the expansion was not uniform: growth in construction plunged and agriculture is reeling under the impact of two back-to-back weak monsoons.
Led by new models such as the Creta and the i20 range, Hyundai Motor India Ltd’s sales rose 23% from a year ago to 43,651 units in November.
New launches such as the TUV 300 helped utility vehicle (UV) market leader Mahindra and Mahindra Ltd drive up passenger vehicles sales by 36% to 19,662 units. UV sales rose 37%, and car and van sales were up 13%.
The launch of TUV 300 and easing interest rates helped, said Pravin Shah, president and chief executive of Mahindra’s auto division.
At least three firms reported a decline in November sales after a euphoric festive season.
Tata Motors Ltd’s passenger vehicles sales fell 13% to 10,517 units. UV sales declined 22% and passenger car sales by 11%.
Tata Motors plans to launch a new model called Zica next month to strengthen its position in the competitive car market, the company said in a statement on 30 November.
Honda Cars India Ltd and Toyota Kirloskar Motor Pvt. Ltd reported a sales decline of 3.6% and 15%, respectively.
Most two-wheeler makers saw sales skid or remain flat. Honda Motorcycle and Scooter India Pvt. Ltd reported a 11.6% decline in sales to 312,504 units from a year ago.
Market leader Hero MotoCorp Ltd sold 550,731 units in November compared with 547,413 units in the same month last year.
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