The days of runaway growth in the auto market last year seem numbered, with two of the top three carmakers in the country — Maruti Suzuki and Tata Motors — reporting a drop in sales in June.
Weighed down by a negative market sentiment because of rising fuel prices, higher borrowing costs and increased vehicle prices, the slowdown in sales last month confirms the trend of the past few months.
After rising 30 per cent in 2010-11, passenger car sales moderated to 13 per cent in April and seven per cent in May. Maruti Suzuki, which sells every second car in India, saw domestic sales drop four per cent in June over the same month last year, while rival Tata Motors' sales fell by 21 per cent.
Maruti's poor performance follows the loss of 10 working days in June following a strike at its Manesar plant. In addition, both its Gurgaon and Manesar plants were closed for another six days for maintenance. Mr R. C. Bhargava, Chairman, Maruti Suzuki, however, was optimistic that the slowdown would not continue beyond a few months. “It would be many months after which we have seen negative sales. These things work in cycles, so it will correct itself as the economy picks up again,” he told
The second largest domestic carmaker Hyundai, saw its sales rise 11 per cent, though this was still lower than the 15 per cent growth seen in May. Maruti, Hyundai and Tata Motors together account for around 75 per cent of the cars sold in the country.
“The market continued to be slow, but Hyundai's sales have grown partially due to the success of the new Verna. We have received over 21,000 bookings for it so far,” said Mr Arvind Saxena, Director, Marketing and Sales, Hyundai Motor India.
Higher sales
Home-grown automaker Mahindra & Mahindra, and Ford, however, managed to buck the trend with 21 per cent and 8 per cent growth, respectively. Mahindra's only passenger car offering — Verito (the rechristened Logan) — saw sales almost tripling to 1,510 units in June. Volkswagen sold 5,397 units in the month, while Skoda sold 2,611 units and Nissan 1,632 units (nearly all of it Micra hatchback). Honda, which is facing pressure from diesel-powered offerings from competitors Volkswagen and Hyundai and slashed the prices of its best-selling model City last month, sold 3,455 units in June. Honda's sales were lower than June last year (4,595 units), though higher than this May's 2,334 units.
Two-wheelers
With a 20 per cent sales growth, Hero Honda posted its highest-ever quarterly sales at 1.52 million units on the back of 5-lakh plus sales for each of the last three months. TVS Motors' sales rose 14 per cent, while Yamaha's sales jumped 30 per cent to 36,595 units.