Weak buyer sentiment continues to hurt car sales

The two biggest passenger vehicle manufacturers in India Maruti Suzuki India (MSIL) and Hyundai Motors India (HMIL) posted a low 1 per cent and 4.8 per cent growth respectively in domestic sales during the month.

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For MSIL, the mini segment that includes Alto and Wagon R saw a 14 per cent decline in sales.

Weak buyer sentiment continued to hurt car sales in the month of December with major car manufactures announcing either low single digit growth or decline in sales growth in December over the same month last year.

The two biggest passenger vehicle manufacturers in India Maruti Suzuki India (MSIL) and Hyundai Motors India (HMIL) posted a low 1 per cent and 4.8 per cent growth respectively in domestic sales during the month. Even Mahindra & Mahindra reported a marginal 1 per cent increase in total vehicle sales at 39,755 units in December 2018.

There were others who either witnessed a weak sales growth or a decline in sales. While Honda Cars India announced a 4 per cent growth in sales in December to 13,139 units, Tata Motors reported 8 per cent decline in domestic sales at 50,440 units in December as compared with 54,627 unit sales in the December 2017. Toyota Kirloskar Motor India that reported over 15 per cent decline in sales in November announced a 10 per cent increase in car sales in December to 11,830 units.

For MSIL, the mini segment that includes Alto and Wagon R saw a 14 per cent decline in sales while the compact segment that includes Swift, Celerio, Baleno, Ignis and Dzire witnessed a 3.8 per cent decline in growth in December 2018 over the same month last year. The growth were seen for sales of Ciaz that jumped by 98.7 per cent to 4,734 units and Vans segment that expanded by 38.8 per cent to 15,850 units.

The weak sales in December follow a bad sales growth in November when MSIL announced a 0.5 per cent growth in PV sales and Hyundai announced a decline in sales. On the other hand, M&M and Honda Cars had reported doubt digit sales growth in November at 15 per cent and 10 per cent respectively.

Maruti Suzuki sold 1,19,804 passenger vehicle units in the domestic market while Hyundai sold 42,093 units in December.

Buyer sentiment turned weak over the last few moths following high fuel prices, tight liquidity situation of Non-Banking Financial Companies and high interest rates in the economy.

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“We’re happy to close the year with a series of positive milestones despite the dampening effect on consumer sentiment owing to hike in fuel prices, higher interest rates, and increase in insurance premium,” said Toyota India’s deputy MD N Raja. Over all the calendar year sales growth have been on the lower side in 2018. While MSIL posted a 7.2 per cent growth in 9 month period between April and December 2018, Hyundai announced a 4.3 per cent growth in domestic car sales in 2019. Toyota’s annual domestic sales in 2018 grew 9% to 1,51,474 units.

The tractor sales witnessed a mixed sales growth. While market leader M&M announced a 6 per cent decline in its total tractor sales in December to 17,404 units, Escorts tractor sales rose 27 per cent to 4,598 units during the month.