Home / Industry / Manufacturing /  Car, utility vehicle sales rise in November

Mumbai: Propelled by launches of new models and a softening of fuel prices, sales of cars and utility vehicles rose in November after declining for two consecutive months.

Cumulative sales of the top five auto makers, which sell three out of every four cars bought in India, expanded 9% to 174,939 units in the month compared with a year ago, according to sales data released by individual companies.

Car market leader Maruti Suzuki India Ltd reported a 17% jump in sales to 1,00,024 units in the month, paced by best-selling compact models that include the Swift and Dzire.

Sales of these two models rose 13.8% to 32,804, offsetting a slight decrease in sales of the small cars Alto and Wagon R to 37,746 units from 38,040 units a year ago, indicating that many first-time buyers are still waiting on the sidelines.

Analysts stopped short of calling the higher November sales a recovery, given that unsold stock at dealers and discounts offered for vehicle purchases remain high.

“It’s difficult to say if it’s a conclusive trend," said Ajay Srinivasan, director of Crisil Research, an arm of the rating company Crisil Ltd.

A few manufacturers are benefiting from higher demand because of new model launches, and it cannot be called a broad-based recovery, added Srinivasan.

“For some manufacturers, the discounts including the exchange bonus, corporate discounts and other incentives are close to 10% to 20% of the new models," he said. Also, the inventory period has gone up from five-to-six weeks to eight-to-ten weeks, he said.

Still, Srinivasan conceded that the decline in oil prices has lifted the sentiment in the car market. Crisil Research projects passenger vehicle sales to rise 5-6% in the year to next 31 March, compared with a decline of 3.8%— the first in 11 years—in fiscal 2014.

Indian Oil Corp Ltd said on Sunday that it had reduced the price of petrol by 91 paise a litre, the seventh reduction since August, and diesel by 84 paise per litre, the third straight cut, after the global price of crude oil fell to the lowest in four years.

Hyundai Motor India Ltd, the country’s second largest car maker, reported an increase of 6% in sales to 35,511 units. Rakesh Srivastava, senior vice-president, sales and marketing, attributed the increase to the four new models the company launched last year.

Tata Motors Ltd, India’s largest auto maker by sales, reported a rise in passenger vehicle sales, snapping a long declining streak, on the back of the newly launched Zest sedan. Although on a low base, sales increased 16% to 12,021 units in November from a year ago.

It’s the first monthly increase in domestic sales reported by Tata Motors in 20 months. The last time the company had a sales increase was in March 2013.

Passenger vehicles sales at utility vehicle market leader Mahindra and Mahindra Ltd declined by 18% to 13,765 units.

Mahindra has been ceding ground to rivals in the passenger vehicles segment. With launches of new models lined up from the next calendar year, the maker of Scorpio and XUV5OO models is expected to recover some of the ground it lost to foreign car makers such as Honda Cars India Ltd and Ford India Pvt. Ltd. Sales at other firms declined.

The BSE’s Auto index rose 0.33% to close at 19,283.92 points while the benchmark Sensex fell 0.47% to 28,559.62 points.

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