Passenger car sales plunged in May,the seventh consecutive month of decline,indicating that consumer sentiment still remains low on the back of uncertainty on macro-economic growth,rising diesel fuel prices and high interest rates. Car makers and industry experts expect growth to only return in the second half of the fiscal,starting with the festive season.
The steep drop in sales was precipitated by market leader Maruti Suzuki,which saw domestic volumes drop 13 per cent at 77,821 units in the month. In a first,sales for Maruti fell for all its diesel models the Dzire,Swift and Ertiga,though mini cars like Alto and WagonR saw a growth of 5 per cent on the back of rising demand for petrol cars over the past few months.
Rival Hyundai saw a flat growth,maintaining volumes at 32,102 units on strong sales of the Eon,i20 and Verna posted a flat growth,while exports its the biggest car exporter form India were up 4.6 per cent at 24,754 units. Tata Motors continued the sales decline recording a 46 per cent drop in volumes in May at 11,134 units.
M&M,which had outperformed the industry in FY13 on the strong demand for its diesel-powered utility vehicles,saw a continued moderation in sales in May. Volumes in the month were up 5 per cent for the carmaker at 22,244 units as demand for diesel cars slowed down on rising fuel prices and a recent increase in excise duties on SUVs made most of its vehicles more expensive.
Pravin Shah,CEO (automotive) at Mahindra said,The growth in capital investment and private spending have also slowed down which is a cause for concern. At Mahindra we remain cautiously optimistic of the situation and do hope that on the back of the new product launches,the auto industry will rev up sooner than later.
Toyota Kirloskar saw sales drop by 35 per cent to 10,023 units in the month,prompting it to correct rising dealer inventories by cutting down production.
However,Renault,General Motors and Honda were able to buck the trend largely on the back of successful new launches. For Renault,the Duster continued to drive sales selling 5,146 units in May 82 per cent of the companys 6,300 units in the month.
GM saw new launches like the Sail sedan and Enjoy MPV drive sales up 40 per cent in the month to 8,500 units,while the success of Hondas first diesel car in India the Amaze sold 6,036 units in the month,led the carmaker post its highest-ever domestic sales at 11,342 units. FE
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