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Car makers see January sales dip, look to Budget for lift

Source : BUSINESS_STANDARD
Last Updated: Sat, Feb 02, 2013 04:20 hrs
Employees work inside the newly inaugurated plant for Tata Nano car at Sanand

The new year failed to bring cheer to car companies in the domestic industry, with 10 of the country's leading automobile manufacturers together posting a decline of 4.7 per cent in sales at 216,511 units last month. The industry is now hoping for some respite from growth-oriented measures in the Union Budget to be announced on February 28 to rev up numbers in the near future.

These companies, who released their sales data today, had reported combined sales of 227,511 units in the corresponding period last year.

Industry growth was dragged down by Tata Motors, Toyota Kirloskar, and the duo of US-based car makers Ford and General Motors - all struggling to grow sales through most of the current financial year on account of high interest rates and fuel prices.

P Balendran, vice-president, corporate affairs, General Motors India, said, "Passenger car segment in January this year is down 13 per cent compared with January 2012. If the current macroeconomic uncertainties continue, the market is not expected to turn round in the short term. Though there is a positive direction, with a small interest cut by the RBI, the market is expected to improve only in the second quarter, that too if we get a growth-oriented Budget."

While sales dropped a whopping 56 per cent to 15,209 units for Tata Motors on back of weak demand for small car Nano and products in the Indica and Indigo family, Japanese automobile major Toyota, too, took a hit on dipping demand for cars from the Etios series.

Experts said a lack of new products, an ageing line-up and poor brand perception of Tata Motors' passenger vehicles have been taking a toll on its sales. Tata Motors could only manage to sell 11,192 units of the Nano, Indica and Indigo combined last month, against the initial targeted volumes of 20,000 units a month from Nano alone.

In the period under review, sales at Toyota Kirloskar Motor declined 23 per cent to 13,329 units. "The market is still witnessing a slowdown, specially in the passenger car segment. The repo rate cut is a welcome step. With the Budget round the corner, we are looking for some more measures that will bring about positive growth", said Sandeep Singh, deputy managing director and chief operating officer, (marketing and commercial).

Even though Maruti Suzuki managed to cross the 100,000 mark in wholesale volumes for the first time this fiscal, growth remained moderate at two per cent in January. The company sold 103,026 units in the domestic market last month driven by demand for sedan DZire and Ertiga.

However, sales continued to falter in the entry-level small car segment (M800,Alto, WagonR and A-Star) which are available only in petrol powered options.

Korean auto major Hyundai Motor India Limited too reported a marginal growth of 1.2 per cent at 34,302 units in domestic sales. The company, however, said that the reduction in price differential between petrol and diesel has resulted in an increase in interest for its petrol models. Rakesh Srivastava, vice president (sales and marketing, HMIL) said, "The change in price differential between petrol and diesel prices has increased interest in petrol cars, reflecting in the waiting period of models like Eon, i20 and Verna petrol.

Marketing initiatives in the rural markets are bringing volume growth."

Utility vehicle major Mahindra & Mahindra was perhaps the only volume player to buck the sluggish trend and record a strond 33 per cent growth in sales for its diesel driven models. The company sold 26,555 units last month as compared to 17,395 units sold in January 2012.


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