New Delhi: Auto sales in India fell in March due to tepid demand in both urban and rural areas. This has led to most of the automakers, including Maruti Suzuki India Ltd, missing their sales growth projections for the just-ended fiscal year.
Maruti Suzuki said on Monday that its total sales in March fell 0.7% year-on-year to 147,613 vehicles.
Sales for the year ended 31 March increased by a modest 6.1% to about 1.75 million vehicles as the company missed its revised forecast of an 8% growth. This is the first time since FY14 that India’s largest passenger vehicle maker has missed its sales forecast.
Vehicle sales in India are counted as factory dispatches, or wholesales, and not retail sales.
Barring its sole light commercial vehicle model, Carry, the Suzuki Motor Corp. unit recorded a 1.5% year-on-year drop in passenger vehicle sales to 145,013 vehicles in March.
Sales at Mahindra and Mahindra Ltd grew 4% to 27,646 vehicles in March helped by the compact sport-utility vehicle, XUV300, which was launched in February.
For the last fiscal year, Mahindra’s passenger vehicle sales grew by a marginal 2% underscoring a sharp contraction in demand in rural regions. The local unit of Japan’s Toyota Motor Corp. recorded a 2.2% y-o-y drop in sales in March to 12,818 units.
“We have closed FY19 with robust double-digit growth of 11% at an overall level, despite strong headwinds faced by the Indian automotive industry this year. This growth has been supported by our three new product launches, which have been well received in the market," said Rajan Wadhera, president, automotive sector, M&M, referring to the company’s entire product range comprising passenger vehicles, three-wheelers and commercial vehicles.
One of the factors behind the subdued performance is the decision of most of the companies to reduce production in the March quarter to trim their inventory. Higher oil prices and a weaker rupee are among factors which have affected vehicle sales in India since September. Sales during the festive season fell to a five-year low in 2018.
Honda Cars India Ltd, however, bucked the trend as it reported a 27% jump in sales to 17,202 vehicles in March thanks to demand for its compact sedan Amaze. The company also witnessed an 8% increase in sales in the last fiscal year.
Rajesh Goel, senior vice- president and director, sales and marketing at Honda Cars, said strong sales efforts from dealers and the company in a tough market led to the growth.
Mirroring the slowdown in the manufacturing sector and the overall economy, medium and heavy commercial vehicle sales of Tata Motors—India’s top commercial vehicle maker—fell 9% in March to 15,327 vehicles. Such vehicles are used for transporting goods and people.
Overall sales of Tata’s commercial vehicles—combining M&HCV and light commercial vehicles—grew 4% y-o-y to 50,917 units in March. The company recorded a 12% increase in full-year sales to 1,51,105 vehicles.
Ashok Leyland Ltd, the second-largest commercial vehicle maker, also posted a 7% decline in sales of heavy and medium commercial vehicles in March to 15,235 vehicles. For the full-year, sales increased by 13% on the back of robust growth in the fiscal first half. The weak sentiment continued in the two-wheeler segment with market leader Hero MotoCorp Ltd reporting a 20% drop in sales in March to 581,279 units.