Launches, festive season boost Aug car sales 10%

Written by fe Bureau | New Delhi | Updated: Sep 2 2014, 11:37am hrs
With the start of the festive season last week, domestic car sales in August recorded over 10% growth. The good show was also on the back of new launches, improving consumer sentiment and last years low base. After two sluggish years, demand has been strong since May this year, when passenger vehicle volumes went up 3%, followed by growth of 11% and 6.5% in June and July, respectively.

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With a bevy of launches including Marutis Ciaz sedan and the face-lifted Mahindra Scorpio lined up, the car market is expected to continue the upward trajectory for the rest of the fiscal.

Maruti saw August volumes rise 29% to 98,304 units with all key models, like the Alto, WagonR, Swift and Dzire, performing well. Rival Hyundai, which recently launched the new i20, the i10 Grand and the Xcent compact sedan, also saw 19% growth to 33,750 units. Honda saw a strong 88% jump to 16,758 units despite stopping production of the top-selling City for a month as Amaze and the newly launched Mobilio saw good demand.

Jnaneswar Sen, senior VP marketing & sales, Honda Cars India, said, The festive season has already set in and will bring further cheer to the market. We are geared up for strong sales in coming months.

However, rising diesel prices and a lack of new launches led Mahindra's and Toyota Kirloskar's sales to fall 11% and 6.5%, respectively. Interestingly, after years of decline, Tata Motors saw an improving trend as volumes rose 20% to 10,975 units on the back of its new turnaround vehicle the Zest. Tata's passenger vehicle sales were still down 5% y-o-y, but with another launch the Bolt coming up, that could change. Ford and General Motors also saw 15% and 36% drop in volumes.

Despite the optimism, Kumar Kandaswami, senior director, Deloitte Touche Tohmatsu India, warned, The spurt seems to be more on account of the prevailing sentiment rather than on hard economic data. There may be a tapering off of demand if economic parameters remain weak in the coming months...

In two-wheelers, leader Hero MotoCorp posted a 21% jump in August to 5.58 lakh units while rival Honda saw a 27% rise to 3.71 lakh units. Hero has 10 new launches, including new models, upgrades and refreshes planned for the festive season. TVS saw a 50% jump to 1.90 lakh units while Royal Enfield rose 66% to 26,121 units.

Commercial vehicles (CVs), however, are yet to show any significant uptick, especially with the high-volume light CV segment sharply down Tata Ace family sales were 35% down in the month. Tata Motors' total CV sales were down 23% to 25,428 units, though Ashok Leyland saw a 17% jump to 8,331 units.