Tight liquidity, increased lending rates, poor buyer sentiments and lack of new model launches impacted sales during December
India’s four biggest car makers – Maruti Suzuki, Hyundai, Mahindra & Mahindra and Tata Motors – posted two percent growth in sales during December as dealers struggled to convert enquiries into confirmed bookings. The four companies control over 80 percent of the domestic car market.
Tight liquidity, increased lending rates, poor buyer sentiment and lack of new model launches impacted sales during December. This is despite a steady decline in fuel rates and unusually high discounts offered by all automakers and their dealers to get rid of inventory before entering 2019.
Maruti Suzuki, the country’s largest carmaker, reported just one percent rise in domestic sales during the month at 119,804 units as compared to 118,560 units clocked in the same month last year.
Maruti’s growth was due to the continued demand for its utility vehicles such as Brezza and Ertiga and the Omni and Eeco van. Without these the Delhi-based company reported a fall of 4.7 percent in sales.
The effects of the withdrawal of Wagon R to make room for the new model due on January 23 along with softness in demand for the segment comprising Swift, Baleno, Ignis and Dzire hit overall passenger car sales.
During the last week of December Maruti Suzuki had undertaken the usual maintenance shutdown at its factories which also resulted in reduced supplies to dealers. “Sales during December will be on the lower side because we have lower inventories with dealers before they start accepting fresh stock in January,” RC Bhargava, Chairman, Maruti Suzuki had said to Moneycontrol in December.
India’s second largest car maker Hyundai reported 4.8 percent growth in volumes during December to 42,093 units. The Korean brand’s sales growth was largely aided by added volumes from the Santro, which was launched in October.
The ‘sunshine’ car broke into India’s top ten best-selling cars list in November. The hatchback is believed to have garnered bookings of more than 45,000 units, giving Hyundai a stock-out for 3-4 months.
But utility vehicle specialist Mahindra & Mahindra (M&M) felt the heat in December with sales declining 3 percent. The Mumbai-based maker of Scorpio and Bolero sold 15,091 units of passenger vehicles during December as against 15,543 units sold in the same month last year.
Rajan Wadhera, President, Automotive Sector, M&M said, “In the domestic market, challenges relating to tight liquidity and low buying sentiment continue the de-growth for December. We hope to see good performance in Q4, owing to the anticipated rural demand because of the harvesting season and the launch of our new XUV300 in February 2019."
After consistently beating growth of every large volume player in previous months Tata Motors said its sales growth in the domestic market stood at one percent in December. The company sold 14,260 units as against 14,180 units sold in the same month last year.
Japanese auto giant Toyota Monday said it had clocked 10 percent growth during December to 11,830 units as against 10,793 units sold in the same month last year.
N Raja, Deputy Managing Director, Toyota Kirloskar Motor said, “We are happy to close the year end with a series of positive milestones despite the dampening effect on consumer sentiment owing to hike in fuel prices, higher interest rates, increase in insurance premium."
