//Passenger vehicle sales dip in December on weak sentiment, unsold stock

Passenger vehicle sales dip in December on weak sentiment, unsold stock

Amid tepid sentiment and much of unsold stock, automobile ended the year on a muted note.

Disappointing festive season sales and inventory stockpiling with dealers have prompted ratings agency CRISIL to pare its growth forecast for the Indian passenger vehicle (PV) industry by a hefty 200 basis points, to 7-9 per cent from the earlier 9-11 per cent.

In a bid to correct the mismatch between demand and supply, most had curtailed their despatches to dealers, show December sales data issued by some on Tuesday. Auto in India count despatches to dealers as sales.

Cumulative sales at the top six PV makers — India, Hyundai Motor India, Mahindra and Mahindra (M&M), Tata Motors, Honda Cars India and Toyota Kirloskar — increased to 216,217 units, against 211,876 units in December 2017, a rise of 2 per cent.

An overall increase in cost of ownership, including a higher rate of interest on finance (on the back of liquidity issues facing lenders) have weighed on buyer sentiment. PV sales were down 3.4 per cent in November over last year, a fourth monthly decline since July, the Society of Indian Automobile Manufacturers said last month.

Maruti Suzuki’s December sales were almost unchanged over last year. The maker of the Swift and the Vitara Brezza models sold 119,804 units in the domestic market against 118,560 units in the year-ago period, a rise of 1 per cent.

Maruti has half the PV market and its sales were dragged down by a 14 per cent drop in the mini segment, which includes the Wagon R and Alto models.

With launch of the new Wagon R, to go on sale in the current quarter, the segment is likely to see a revival in volume. Even the compact segment, till recently with best-sellers Swift and Baleno was reigniting the sales chart, saw a decline of 3.8 per cent.

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The new Santro, selling in brisk numbers, helped Hyundai buck the slowing trend. The local arm of the Korean maker sold 42,093 units in the domestic market, an increase of 4.8 per cent over last year. Of this, 7,197 were of the Santro; since it launched in October, the company has got 49,000 bookings for the small car. It is likely to stop taking bookings next week, after these cross the 50,000-mark, said a spokesperson.

December saw M&M’s overall PV sales skid 2.9 per cent, to 15,091 units, over last year. Rajan Wadhera, president of its automotive sector, attributes this to “tight liquidity and low buying sentiment” but is optimistic on the road ahead.

“We hope to see good performance in Q4 (March quarter), owing to the anticipated rural demand because of the harvesting season and launch of our new XUV300 in February,” he said.

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Sales at Tata Motors also remained muted. Maker of the Hexa and Tiago models, it sold a total of 14,260 units, against 14,180 last year. The company plans to launch the Harrier SUV on January 23, as part of a larger strategy to refresh its model line-up and recoup the share it has lost in PVs.

The Indian arms of Honda Cars and Toyota did report an increase in sales, with attractive year-end schemes and good response to some models. Sales at Honda increased 3.9 per cent to 13,139 units. “The market continued to be challenging in December,” said Rajesh Goel, director for sales and marketing at Honda Cars. He added a strong response to the new Amaze and CR-V, and attractive new-year offers helped.

Driven by the Innova and Fortuner, Toyota saw its sales climb 9.6 per cent to 11,830 units over a year ago.

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