With customers taking to new models, carmakers did brisk business in July but the momentum in sales of commercial vehicles flagged, reports Malyaban Ghosh in Mumbai. The top three — Maruti Suzuki, Hyundai and Mahindra and Mahindra (M&M) — posted double-digit volume increases, with Maruti clocking a 14% year-on-year rise, Hyundai notching up a 12% jump and M&M a smart 21%. While Hero MotoCorp managed only a single-digit growth of 9% y-o-y, this was better than the 6% y-o-y rise between April and June.
Honda continued to blaze a trail , reporting a stunning 16.5% increase in volumes and, for the first time, selling more than 4.5 lakh units in a month.
Volumes in the medium and heavy commercial vehicle segment — considered to be a proxy for the health of the economy — were disappointing. At Tata Motors, volumes of M&HCVs dropped by 9% y-o-y in July compared with an increase of 8% between April and June. At Ashok Leyland, heavy vehicles volumes came off by 7% y-o-y whereas in the April-June period they had gone up by 6%. Analysts attribute the fall to less cargo being ferried from the agricultural and manufacturing sectors, a lower-than expected increase in rentals and elevated diesel prices that have dissuaded fleet owners from adding vehicles.
While the better show put up by Hero MotoCorp suggests some recovery in rural markets, analysts are not sure if it’s time to call a turnaround. They believe, however, the higher salaries of government employees following the recommendations on the seventh pay panel should boost spends for both cars and bikes. Meanwhile, new models from Maruti such as the Vita Brezza and Baleno are becoming more popular with buyers; in the April to June quarter, Maruti grew domestic volumes by just 5.4% y-o-y. Pravin Shah, president and chief executive (automotive), M&M, said a growth of 14% in July was creditable given the various regulatory challenges.
“The good monsoon so far has brought in positive sentiment for the economy and that is somewhat reflected in our performance,” Shah said. Korean carmaker Hyundai saw it volumes increase by 12% y-o-y, while volumes for utility vehicles at M&M increased 21% y-o-y as a consequence of healthy demand for its TUV 300 and KUV in models the urban markets.