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Car sales fail to pick up in festive season


The festive season failed to bring cheers to automobile companies. Ten of the country’s leading passenger vehicle manufacturers reported a decline of 23 per cent in sales last month at 170,668 units, as compared to the 221,062 units sold during the corresponding period last year.


After posting scorching growth rates of 30 per cent in the last financial year, passenger vehicles sales declined by nine per cent and subsequently by six per cent in July and August. Sales had picked up in September with the passenger vehicle industry growing by a moderate 1.43 per cent. But with the Reserve bank of India (RBI) increasing lending rates for the 13th time last month, consumer sentiments dipped in the domestic market.

Industry numbers were dragged down with both Maruti Suzuki India Ltd (MSIL) and Hyundai Motor India Ltd (HMIL) together accounting for 60 per cent of sales in the domestic market, registering a decline of 52.2 per cent and five per cent in sales, respectively in a lacklustre festive season.


DOMESTIC SALES (Figures in units) Company Oct-10 Oct-11 % chg Maruti Suzuki 107,555 51,458 -52.20 Hyundai Motor 34,720 33,001 -5.00 Tata Motors 24,478 25,124 2.60 M&M 16,987 18,756 10.40 Fiat 2,025 622 -69.30 Toyota 6,602 10,762 63.00 Ford  9,026 8,091 -10.40 General Motors 10,051 10,062 0.11 Volkswagen 4,343 7,266 67.30 Honda Siel 5,275 5,526 4.80 TOTAL 221,062 170,668 -22.80


While Maruti Suzuki faced disruptions in production due to labour unrest at its Manesar facility last month, Hyundai struggled to gain volumes in a market burdened by high interest rates and increased fuel prices. As against the 107,555 cars the company had hawked last October, MSIL saw the offtake of only 51,458 vehicles in October this year. Sales dropped across categories, with volumes in the company’s bread and butter small car segment falling by 55 per cent to 35,868 units.

Hyundai, in the meantime, sold 33,001 units last month, as against the 34,720 units it sold a year ago. Arvind Saxena, director (marketing and sales), said, “We have seen that sales get a boost in the festival season, but this year sentiment has been tepid. We don’t expect a major upswing in the near future; the challenging economic environment is affecting industry. The Eon has been received well, we have got more than 9,000 bookings till date.”

The US-based Ford, too, registered 10 per cent decline in domestic sales. Nigel Wark, executive director, (marketing, sales and service), India said, “There has been a sharp rise in demand for diesel cars. We have a waiting period on our cars. We are constrained by how many diesel cars we can produce, which has affected sales in the domestic market.”

The country’s third-largest automobile manufacturer Tata Motors managed to marginally scale up volumes. Sales grew by three per cent to 25,124 units.

Two-wheeler cos produce mixed result Hero MotorCorp, India’s biggest two-wheeler maker, on Tuesday announced total sales of 512,238 units in October, an increase of 1.32 per cent, its slowest growth since the start of 2011. The company had dispatched 505,553 units in the same month last year to its dealers.

The company was forced to build up inventory at the dealer end in earlier months to cater to the extra demand arising during the festive season. The company added that it clocked retail sales of about 650,000 units during the month.

Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp, said, “We are delighted with the response this festival season. The strong double digit growth in our retail sales in October indicates that our new brand identity, campaign and recent launches have received great acceptance from our customers.”

Meanwhile, Honda Motorcycle and Scooter India (HMSI), India's fourth biggest two-wheeler manufacturer posted an overall growth of 20 per cent in sales at 178,181 during the reporting month as against 148,861 units sold in the same month previous year.

Another Japanese brand Yamaha posted an overall growth of 27 per cent in October at 47,240 units as compared to 37,251 units sold in the corresponding month last year. The export figures for Yamaha stood at 9,011 units in October while 5,460 units were exported in October last year, a growth of 65 per cent.