Car sales decline in India: New car, SUV launches to keep festive season sales alive

During the festive season big car launches like the new 2018 Maruti Suzuki Ertiga and the Hyundai Santro along with SUV like Honda CR-V will give the car sales in India a big push.

By: | Updated: September 11, 2018 3:12 PM


Cars and SUV Sales in India has continued to decline for the second consecutive month with a drop of over 2.4% in August 2018. The Industry sold a total of 2,87,186 passenger vehicles last month as against over 2.94 lakh cars sold in August last year. Sales of cars dropped marginally by 1% to 1,96,847 units but UV sales that includes SUVs dropped by 7.11% by selling 73,073 units. The decline in sales is largely due to a higher base due to GST last year and also the floods in Kerala has seen a slump in sales.

"There is an impact of high base effect, as sales last year from July to September were high after GST implementation," said SIAM Director General Vishnu Mathur. Society of Indian Automobile Manufacturers (SIAM) also believes that rising fuel prices have a very little impact on new vehicle sales. He was quoted saying, "fuel prices keep fluctuating and it doesn't have an immediate impact on sales, although in the long term it can have some impact." India's leading carmaker, Maruti Suzuki sales declined by 3.5% in August and Hyundai Motor India sales too declined by about 2.5%. Tata Motors reported profits with its sales going up by 24% at 20,323 units.

In two-wheelers, Motorcycles sales has gone up by 6.18% by selling 12.06 lakh units as against 11.36 lakh units sold in the same month last year. Scooter sales were marginally down at 6,69,416 units as against 6,73,444 units in August last year. "Two-wheeler sales were partially affected by the restriction imposed in West Bengal on new purchases without driving licence," Mathur said.

Hero MotoCorp posted 1.29 per cent increase at 5,91,401 units in August. Rival Bajaj Auto saw its sales jump by 27.25 per cent to 2,18,437 units. Honda Motorcycle and Scooter India (HMSI) recorded 4.9 per cent increase in its bike sales at 2,01,348 units last month.

In the scooter segment, leader HMSI saw sales dip by 4.66 per cent to 3,75,901 units. Chennai-based TVS Motor Co, however, posted 9.8 per cent increase at 1,20,198 units. Hero MotoCorp's scooter sales in August were at 71,639 units, down 7.73 per cent.

Anupama Arora, Vice President & Sector Head, Corporate Sector ratings, ICRA said that "one-off events in select geographies, as well as delayed festive season, resulted in muted two-wheeler volumes in August 2018; the month witnessed a 2.9% expansion in volumes YoY against 14.7% in corresponding previous with floods in Kerala and restrictions on vehicle purchases in West Bengal adversely impacting the overall domestic volumes. Nevertheless, the underlying demand drivers remain strong and ICRA continues to maintain 8-10% growth forecast for FY2019."

SIAM said sales of commercial vehicles jumped by 29.56 per cent to 84,668 units in August as against 65,350 units in the year-ago month.

"Considering how this segment has grown above expectations we are looking at having a re-look at our forecast for an upward revision," SIAM Deputy Director General Sugato Sen said. SIAM had earlier projected that the CV segment could grow around 10-12 per cent this fiscal. However, in the April-August period, the segment has grown by 41.67 per cent to 3,91,260 units as against 2,76,182 units in the year-ago period.

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The auto industry body said vehicle sales across categories in August registered a growth of 3.43 per cent to 23,81,931 units from 23,02,902 units in the same month last year.

Carmakers have also lined up an array of new launches this festive season. We have already seen the launch of Mahindra Marazzo MPV in India and going into the festive season we will see Honda CR-V making its market debut along with the likes of new Mercedes-Benz C-Class. All-new Maruti Suzuki Ertiga and Hyundai's biggest launch of the year with the Santro will keep the festive buzz in India alive giving a big boast to company's sales.

- With inputs from PTI

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