For every athlete, it’s a good feeling when he/she makes a good start off the starting block but what’s also important is how he/she maintains speed throughout the race. It’s a similar outlook for the Indian automobile industry.
In FY2019, with domestic market sales of nearly 25 million units (24,972,788), the industry notched 14.22 percent year-on-year growth. And exports added another 4 million units (4,041,777), up 16.12% YoY. Made-in-India production also hit a high of 29 million units, up 14.78 percent YoY.
With some OEMs across the PV, CV and two-wheeler segments announcing their sales numbers for April 2018, it’s apparent that overall sales last month will be robust. So, while the start of the fiscal year 2019 will be good, what’s important is that the momentum be carried across throughout the next 11 months of the fiscal.
At the outset, things still look good, what with consumer sentiment up, forecast of a normal monsoon, uptick in rural India demand and return of buoyancy to the important CV market. But the sales speedbreaker could be the already high and rising fuel prices. Petrol at Rs 82.48 a litre and diesel at Rs 70.20 a litre (Mumbai prices) as of May 2 are burning a hole in motorists’ wallets. For India, which is the world’s third largest oil importer, the sharp spike in global crude oil prices over the past fortnight will adversely impact the automobile industry, albeit not immediately. For the PV segment, urban citizens’ growing preference for shared mobility is already having an impact on sales as most metros have reported YoY declines in sales. OEMs though hope to make up the difference and more from new sales in Tier 3 and 4 cities.
HOW THE PV SEGMENT FARED IN APRIL
Maruti Suzuki India: The country’s leading carmaker registered cumulative sales of 163,434 units in April 2018, its best performance ever in a month, posting notable growth of 13.4 percent (april 2017: 144,492). The significant volumes imply that the bellwether of the Indian passenger vehicle segment sold an average of 5,447 every day.
The growth, however, could primarily be attributed to surging sales of its range of compact cars, which include the Swift, Ignis, Celerio, Baleno and the Dzire. The collective sales of these models stood at 83,834 units, a substantial jump of 31.8 percent over the year-ago sales of 63,584 units.
The recently introduced new Swift hatchback is the one leading the charge, having received a strong market response and selling 17,291 units in its maiden month in February (February 2017: 12,328 / +40%). Its compact sedan sibling, the Dzire, which was launched in May 2017, is also one of the major growth drivers in the compact segment for the company.
Hyundai Motor India: The No 2 player by sales volumes, Hyundai Motor India sold 46,735 units in April, growing 4.41 percent (April 2017: 44,758). The Korean carmaker has been seeing consistent demand for its two hatchbacks – the Grand i10 and the i20 – and also for the Hyundai Creta SUV, all of which have been making their way into the Top 10 best-selling PVs’ list month on month over the last fiscal. , the company recently introduced the updated avatar of the i20, giving it a slew of cosmetic tweaks, and a new CVT option in its petrol avatar.
Honda Cars India: Honda Cars India started off the new fiscal with an average performance, selling 9,143 units, down a substantial 37 percent (April 2017: 14,480). The primary reason for the significant drop in sales is zero dealer dispatches of its Amaze compact sedan last month. .
According to Rajesh Goel, SVP and director, Sales & Marketing, Honda Cars India, “Honda Cars India’s sales in April are as per plan. We are preparing for the launch of the all-new Amaze this month and did not have stocks of the outgoing Amaze. Besides, the City and WR-V which were launched last year had witnessed new model sales spurt around this time. Both these reasons are reflected in lower wholesales in April this year as compared to last year. It’s a temporary phenomenon. There is a very strong interest from the market for the all-new Amaze and we are confident that overall sales will be robust after the introduction of the new model.”
While the City sedan was the best-seller for Honda last month with 3,366 units, the Jazz-based WR-V crossover went home to 2,949 buyers, with the Jazz itself selling 1,747 units in the month. What would be interesting to see in the coming months is the performance of the City as arch rival Toyota Kirloskar Motor has just introduced its competent Yaris sedan, pitched directly against Honda's segment best-seller.
Tata Motors: The homegrown carmaker sold 17,235 units last month, a substantial increment of 34 percent over year-ago sales of 12,827 units. While it saw continued demand for the Tiago hatchback, Tata Motors also witnessed a three-fold growth in its UV sales based on the . In FY2018, barely within seven months of its launch, the snazzy Nexon has sold a total of 27,747 units, comprising for 53.47 percent of Tata Motors' total UV sales of 51,891 units. The company is now in both the petrol and diesel versions of the crossover.
Mahindra & Mahindra: UV specialist Mahindra & Mahindra (M&M) recorded good growth with its PV sales notching 21,927 units, up 13 percent (April 2017: 19,325).
According to Rajan Wadhera, president, Automotive Sector, M&M, "After a good FY2018, we have had a strong start to FY2019, having registered a good overall growth of 22 percent for April 2018. We have also seen an encouraging response to our recent launch of the plush new XUV500.”
Ford India: The American carmaker has reported domestic market sales of 7,428 units, remaining consistent in performance to April 2017, when it had sold 7,618 vehicles.
According to Anurag Mehrotra, president and managing director, Ford India, “Increasing inflation trajectory which might weigh on customer’s access and cost to credit, coupled with increasing crude prices, could lead to passenger vehicle industry growing at low single digits so far this year.”
Toyota Kirloskar Motor: The Bangalore-based carmaker’s FY2019 has begun with sales of 13,037 units, which marks flat growth (April 2017: 12,964). While the Innova Crysta MPV and the Fortuner SUV have been its top grossers month-on-month, the company, for the first time ventured into the C-segment space in India, introducing its new Yaris sedan.
According to N Raja, deputy managing director, Toyota Kirloskar Motor, “Last month was quite eventful for us with the bookings opening for the Toyota Yaris. The Yaris is loaded with first-in- segment features and offers a great value proposition in terms of best-in-segment quality, comfort safety and performance.”
Clearly, the PV segment is riding high on the novelty and charm of some of the new models being introduced in the market, which are keeping the sales charts ticking for their manufacturers. However, with fuel prices burning a hole in the wallet, fuel efficiency is certainly going to be one of the key parameters while narrowing down on a new car purchase in these times of inflation, where there seems to be no cap whatsoever. Also, FY2018 could be the year where safety takes a paramount spot in buyers’ consideration, given that manufacturers are also gearing up for the upcoming crash norms, which are set to encompass all new models by October 2019.