Car sales lose momentum in June 2015

After posting upbeat numbers month-on-month in April and May, the month of June saw a dip in car sales due to weak buyer sentiment in anticipation of weak rainfall coupled with a weak demand in the rural areas. Moreover, base effect as a result of companies pushing dispatches in the same month last year, as the government moved to end excise benefits, also in some measure weighed on sales last month. Sales volumes rose nearly 16% and 5% respectively in April and May.

Of the carmakers who released their sales numbers for June 2015, most of them reported a year-on-year decline, while some reported flat sales or slightly improved figures.

The country’s largest carmaker Maruti Suzuki posted a 1.8% year-on-year rise to 1,14,756 units in June with domestic sales accounting for 1,02,626 units, up 1.6% year-on-year. In the first quarter (April-June) the automaker registered sales (including exports) of 3,41,329 units, up 13.8 percent over the same period last year.

In the entry level-segment, the Alto and Wagon R sold 34,336 units, down 27.9% indicating a decline in sales from the rural market and Tier 2 and 3 cities. Among the compact cars, sales for the Swift, Celerio, Ritz and Dzire clocked remained upbeat in June at 45,701 units, up 24.4% on year. Maruti’s mid-size sedan segment, the Ciaz, sold around 3,700 units, crossing total sales of 45,000 units since its launch in September 2014.

The weak buyer sentiment came about as interest rates weren’t cut. However, demand is likely to improve in the coming months due to a slew of launches by automakers. Although the present environment is challenging for car companies to introduce new cars in, sales are likely to get a boost if the product goes down well with the Indian buyers.

Hyundai Motors, the second-largest carmaker registered domestic sales of 36,300 units in June, up 8.3% from last year. Cumulative sales, however, grew only 3.1% to 52,062 units, dragged down by weak exports.

"In a market bearing low traction, consistent demand of Elite i20, Grand, Xcent led to Hyundai’s volumes growing by 8.3% and with the upcoming launch of global SUV Creta, we are confident of sustained growth,"  Rakesh Srivastava, Senior Vice President, Sales and Marketing, HMIL said. The automaker is set to launch its much-awaited SUV, the Hyundai Creta in India on July 21, 2015.  The car will rival the Renault Duster, Mahindra Scorpio and the upcoming Maruti S-Cross.

Honda Cars India registered monthly domestic sales of 18,380 units in June, up 12.65% from the corresponding month last year. Honda managed to put up a double-digit growth in June despite grappling with production issues with some of its models. The Honda City, for instance, is facing delay in manufacturing and some of its variants have a waiting period of 2-4 months. Jnaneswar Sen, Senior Vice President, Marketing and Sales said that the company will be able to expand its footprint further in India with the launch of its upcoming new model, the Jazz. The Honda Jazz will be launched on July 8 and will rival Hyundai’s Elite i20, which has had a great run so far in the premium hatchback segment.

Mahindra & Mahindra Ltd witnessed negative sales during the month. The automaker’s domestic sales of passenger vehicles stood at 15,880 units, down 15% from 18,635 units sold in June 2014. Overall domestic sales were at 33,282 units, down 9% on year. The company is, however, optimistic over demand for its vehicles in the near term. Pravin Shah, President and Chief Executive (Automotive), Mahindra & Mahindra said, “With a normal monsoon till date, an overall positive sentiment and a slew of new launches in the automotive industry, we expect buoyancy in demand going forward.”
Mahindra recently launched an updated version of its XUV500.

Toyota was another carmaker after Mahindra whose sales dipped in June. The company sold 10,464 units, down 12.87% as against 12,010 units in June last year. Sales were affected as there was limited production last month on account of planned annual plant shutdown scheduled from May 29 to June 6, for regular maintenance, the carmaker said.

“We sold 10,464 units in the domestic market last month, due to limited production on account of the planned shutdown. We deeply regret the inconvenience caused to our customers due to this,” N Raja, Director and Senior Vice President, Sales and Marketing said. Toyota stated that the facelifted version of the Camry Hybrid, launched in May, has been received well by the Indian buyers has sold more than 300 units in the last two months, as against the 720 units sold in the whole of last year. The hybrid constitutes 87% of the total Camry sales, Toyota added.

Tata Motors saw its passenger car sales rise significantly by 30% to 10,281 units in June, from 7,911 during the same month last year. The company says that growth was largely driven by the new Zest and Bolt, and the recently launched GenX Nano.

Ford Motors posted negative sales in the month of June as its car sales in the domestic market dropped by a considerable 37.62% to 4,527 vehicles from 7,258 units in the same month last year. The carmaker is now banking on new launches it has lined up in the coming months to ramp up its sales. Anurag Mehrotra, Executive Director, Marketing, Sales and Service, Ford India said, "With three new products planned in next nine months, we will usher in excitement with the introduction of our compact sedan Figo Aspire and are well on-course give customers even more reasons to visit Ford showrooms in the near future."

European automaker Volkswagen saw a significant jump in its sales in June. The carmaker sold 4,039 units, recording a 31% rise in sales as against 3,079 units sold during the same month last year. The carmaker attributed the increase in sales to successful launch of its New Vento and the New Jetta.
Michael Mayer, Director, Volkswagen Passenger Cars, said, “We have witnessed our 5th consecutive increase in monthly sales, and we attribute this achievement to our recently launched New Vento. The growth of 31% in the month of June 2015 is higher than the industry average, and we remain confident of continuing to improve our sales figures over the coming months.”