Auto sector not out of the woods yet

Maruti Suzuki’s sales were supported by its mini cars which include the Alto and WagonR, super-compact segment which consists of the Dzire Tour.

By: ENS Economic Bureau | Amitabh Sinha & Debabrata Mohantynew Delhi, Bhubaneswar, New Delhi | Published: June 2, 2015 2:21:56 am

The auto sector presented a mixed picture in May with Maruti Suzuki and Tata Motors posting double-digit growth while other carmakers registered subdued growth. While broadly there’s been an uptick in overall industry sales in the last three months, analysts and company officials continue to maintain caution on the outlook as a weak rural demand still clouds motorcycle sales, while passenger cars are largely being driven on the back of new launches.

The month saw the country’s largest carmaker Maruti Suzuki posting sales that were above expectations. The company also beat its peers, which could not match up to its volumes.

Sales were supported by its mini cars which include the Alto and WagonR, super-compact segment which consists of the Dzire Tour, and mid-size cars like the Ciaz. Sales of Alto and WagonR increased by 20.6 per cent in May compared with the corresponding period of last financial year. The worrying part is that the compact segment comprising Swift, Ritz, Celerio and Dzire declined by 5.7 per cent.

That the market is not totally out of the woods and consumers have not loosened their purse strings is reflected in sales at Hyundai, which like the previous month continues to post low, single-digit growth of 3.4 per cent.

Elsewhere the trend remains the same: Mahindra & Mahindra continued to witness a decline as demand for utility vehicles slid on the back of weak rural demand and the lack of a compact SUV in its portfolio. However, Tata Motors increased volumes on the back of new launches like the Zest and Bolt.

Two-wheeler sales continued to bear the brunt of weak rural demand, with the largest player Hero MotoCorp posting a drop in sales.

In the commercial vehicles, for Tata Motors, the M&HCV sales continued to show growth at 10,788 units, higher by 17 per cent over May 2014. Light and small commercial vehicle sales, however, continued to reflect the industry decline and were at 12,892 units, a decline of 19 per cent over last May. These impacted the overall commercial vehicles sales for the company in May 2015 in the domestic market that were at 23,680, a decline of 6 per cent over May 2014. FE

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