Mumbai: The arrival of the monsoon, albeit late, and new launches buoyed consumer sentiment and helped auto firms keep up their sales momentum in June, according to monthly sales data released by auto makers on Friday.

Auto makers are hopeful that a likely end of the Supreme Court-imposed ban on diesel vehicle sales in the National Capital Region, higher purchasing power of government employees on pay hikes approved by the cabinet this week and a steady progress of the monsoon will add further heft to car and two-wheeler sales in the coming months.

Notwithstanding the enablers, sales at market leader Maruti Suzuki India Ltd declined sharply in June because of a fire at one of the company’s key suppliers. Maruti’s domestic sales during the month fell 10.2% to 92,133 units, compared with a year ago. The volumes contracted owing to a fire at the factory of Subros Ltd, a vendor that supplies air-conditioning systems. The company expects to recover the production loss during the course of the year.

With the exception of the utility vehicle segment, which includes the Brezza, the company’s volumes dropped across all segments during the month. While sales of entry-level cars such as Wagon R and Alto dropped 19%, compared with last year, super-compact models which include the Dzire saw a decline of 28.5%. Ciaz’s sales, too, went down 24.3%.

Maruti is gradually stepping up the production of newly-launched models Baleno and Brezza to service the pending demand, the company said.

Nitesh Sharma, an analyst at Phillip Capital India Ltd, estimates the company suffered a production loss of 25,000-30,000 units because of the fire at the vendor.

Driven by new models and other enablers such as softer fuel prices and lower borrowing costs, car sales in India have advanced for 11 months in a row. They rose 6% in May, compared with last year.

“All the conditions that support passenger car sales seem to be favourable. With the hope of a good monsoon and the salary increases for government employees, there can potentially be a spurt in the coming months, particularly around the festive season," said Kumar Kandaswami, senior director, Deloitte Touche Tohmatsu India Pvt. Ltd.

Hyundai Motor India Ltd, the second largest carmaker by sales, sold 39,806 units, up 9.7% over last year. Besides new products such as the Creta and Grand i20, Rakesh Srivastava, senior vice-president, sales and marketing, at the firm, attributed the boost to a positive environment.

Utility vehicles market leader Mahindra and Mahindra Ltd, too, saw its passenger vehicle sales increase 7% to 17,070 units.

The advent of a good monsoon has boosted consumer sentiment and propelled demand, said Pravin Shah, president and chief executive of the automotive division at Mahindra and Mahindra Ltd.

But sales of Honda Cars Ltd contracted for the eighth consecutive month. The local arm of the Japanese carmaker saw a steep decline of 38% in sales over the same month last year. Honda sold 11,407 units, compared with 18,380 units a year ago.

Yoichiro Ueno, president and chief executive at Honda Cars India, blamed the poor sales on a shift in consumer preferences, which has led to a high inventory of diesel vehicles at Honda’s dealerships.

The firm has been rationalizing wholesale dispatches to correct the stock situation at the dealerships. Ueno claimed the company’s retail sales (to customers) were much higher than wholesale despatches to dealers.

“The stock levels at dealerships have been almost normalized and we expect our wholesales would match the retail sales levels in July," said Ueno.

The company’s newest addition, the BR-V, has received good acceptance in the market, with over 11,000 bookings, he added.

Sales at Renault India Pvt. Ltd maintained their strong run on the back of the Kwid, with volumes jumping to 11,837 from 4,340 units a year ago.

On the strength of its newly launched Crysta, the new generation Innova, which went on sale in May, Toyota Kirloskar Motor Pvt. Ltd saw its June sales go up 29% to 13,502 units.

Ford India Pvt. Ltd’s sales doubled to 9,469 units from 4,527 units a year ago.

The June sales numbers brought in some changes in the pecking order among the smaller firms in the passenger vehicles market. Toyota zipped past rivals to become the fourth largest firm, while Renault outsold Honda Cars to become the fifth largest. It’s a big climbdown for Honda, which, till a couple of years ago, was the third largest, outdoing Mahindra and Mahindra.

Sales at most two-wheeler firms, with the exception of market leader HeroMoto Corp. Ltd, advanced in double digits.

The sales were driven by scooters and motorcycles that are targeted at urban pockets. While Hero’s sales remained at 408,141 units, volumes at Honda Motorcycle and Scooter India Pvt. Ltd and TVS Motor Co. Ltd rose 23% and 16%, respectively.

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