Car sales set to end the financial year with a growth rate of over 8%

Domestic sales of passenger vehicles — cars, vans and utility vehicles — have retained their growth momentum, clocking an estimated increase of 8 to 9 per cent year-on-year in February. Based on the performance of the seven companies that have announced results, the industry shows a growth rate of 10 per cent to 253,868 units. But this will tone down when we include players who have not announced their numbers. The domestic industry volume has grown at 8 per cent in the April-January period of 2017-18 and now looks set to exit the year with a growth rate of over 8 per cent. Though a decent expansion, this growth is lower than the increase of 9.23 per cent for 2016-17. The industry’s February performance is driven by the double-digit growth in volumes of companies like Maruti Suzuki and Tata Motors. Growth also came from companies like Hyundai, M&M, and Ford. The country’s biggest car maker, Maruti Suzuki, increased its wholesale dispatches to dealers by 13.3 per cent last month to sell 136,648 units. Growth has been led by its compact segment of vehicles. Besides the launch of new Swift, strong demand for vehicles like Baleno and Dzire expanded this segment by 39 per cent to 65,213 units. The mini segment (Alto and WagonR) grew at 2 per cent. The utility vehicle segment grew at 14 per cent, but its mid-size sedan Ciaz saw a volume decline of 17 per cent to 4,897 units.

Ciaz, unlike last February, has a new competitor in the form of Verna from Hyundai. Korean car maker Hyundai reported a volume growth of 5 per cent to 44,505 units in February, riding on demand for new Elitei20 and new Verna. Rakesh Srivastava, director - sales and marketing, Hyundai Motor India, said demand was growing on the strength of stable interest rates and fuel prices, besides macroeconomic factors. “We are not seeing any challenges on the demand front. The Auto Expo helped create a positive momentum,” he added. Homegrown company M&M said its domestic sales of passenger vehicles grew at 8 per cent last month to 22,389 units. Rajan Wadhera, president (automotive sector) at the company, said the performance came on the back of a sustained momentum and demand. Tata Motors, which has now cemented its position as the fourth-largest player in the segment, had the highest growth among the leading players. The company, backed by new products like Nexon and Tigor, sold 17,771 units last month as against 12,272 units in February last year, growing 45 per cent. Honda, which had a high base last February with the launch of new City, has seen a decline of 18 per cent in domestic sales this year to 11,650 units. The company said a planned reduction in production of Amaze sedan had led to the decline. Honda is getting ready to launch the new Amaze later this year. Toyota has reported a 3 per cent growth rate in domestic sales in February, when it sold 11,864 units. American car maker Ford sold 9,041 units in the domestic market as against 8,338 vehicles last year. French car maker Renault has not announced its February sales number but it is learnt to have seen a volume decline of 20 per cent. Players like Nissan and Volkswagen have not announced their numbers.