1. January car sales hit speed braker, shrink to single digit

January car sales hit speed braker, shrink to single digit

After growing in double digits for three months in a row, passenger vehicle sales slowed down sharply in January with the country's top five car makers reporting just a 1.6% year-on-year increase in volumes.

By: | Updated: February 2, 2016 2:23 AM

After growing in double digits for three months in a row, passenger vehicle sales slowed down sharply in January with the country’s top five car makers reporting just a 1.6% year-on-year increase in volumes.

While the increase in prices by about 2-4% taken by most manufacturers across models was one reason attributed to the subdued sales, analysts believe demand is slowing down sharply after some buoyancy seen during the festive season.

“We understand that Maruti’s retail sales in january have exceeded wholesale volumes by around 10,000-15,000 vehicles but why the wholesale numbers were so poor remains a mystery,” observed one analyst. Analysts are not buying the company’s explanation.

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Maruti said business could have been better in the home market but for fewer working days that impacted production and also despatches. The country’s biggest car maker notched up an increase in volumes of less than 1% year-on-year for the first time since April 2014, when they had fallen 12.6%.

Hyundai Motor India posted a rise of 9.3% year-on-year, a subdued number compared to the scorching pace of 20% seen in the six months to December.

However, companies that have come up with new models in recent months such as Mahindra &Mahindra (M&M)-–which launched the TUV300 and Renault with its Kwid—fared relatively well.

It was possible, analysts said, sales were losing momentum because discounts had become smaller on some models.

The promotion and offers during December 2015 by most of the auto companies appear to be much smaller now. “Companies are not overloading dealers with stocks because they too believe demand is slowing,” observed another analyst pointing out that volumes in the year so far had grown in single digits.

The passenger vehicle demand could again pick-up with the launch of new products at and after the auto expo.

Maruti Vitara Brezza, Volkswagen Ameo, Tata Zica, Honda BR-V and Datsun redi-Go are among the major attractions in the mass-market segments that are being expected at the Auto Expo. Meanwhile, demand for commercial vehicles was reasonably strong with fleet owners adding to their fleet. Ravi Pisharody, ED, Commerical, Tata Motors, said he expected M&HCV sales to sustain because fleet owners continue to add vehicles. “We expect a pick-up in demand in the manufacturing, infrastructure and mining sectors. Ashok Leyland saw a growth of 30.47%, driven by the 40% growth in its sales of medium and heavy commercial vehicles.

Tata Motors too saw a growth of 19.87% year-on-year, with 30.34% growth in medium and heavy vehicles and an 11.72% growth in the light commercial vehicle segments. M&M saw a 9.93% y-o-y growth in the light commercial vehicle domestic sales .

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