Car sales fall 20% in March

After a free fall in February, car sales in India for the month of March hit another record low, leading to the overall car sales moving into a negative territory for the entire fiscal, the first in a decade. Passenger car sales for the last month of the financial year ended March 31, fell over 20% led by an across-the-board sharp decline posted by leading car makers that included Maruti Suzuki, Hyundai India, Tata Motors and Volkswagen, among others.
The prevalent glum macroeconomic environment, uncertain fuel prices and rising interest rates have taken a toll, constraining customers to defer car purchases. The offtake has remained low despite historic high discounts of over 10% to 15%. With no positive stimulus on the horizon, industry players expect the tough times to continue in the first half of current fiscal year too.
The decline is steeper on account of large base of March last year, which saw the highest ever sales for the passenger vehicles due to festive season in some parts of the country and delayed Budget leading to people advancing the purchase due to fear of price hike post Budget.
Analysts forecast a single-digit growth of passenger vehicle market, with things likely to take off in the second half
The secondlargest car maker Hyundai India posted a decline of 13.5% to 33,858 units as against 39,122 units sold by the company in the domestic market for the same period last year. The struggle continues for Tata Motors, as its sales in March dropped over 67% to 12,347 units. General Motors and Ford India too posted a double digit decline of 14.94% and 41.61%, respectively.
The ones with utility vehicles in their portfolio, continue to buck the trend and this is despite increase in excise duty for utility vehicles in the recent Budget.
M&M posted a growth of 13% by selling 25,847 units in March. Led by the strong showing of Innova and the new Etios and Liva, Toyota Kirloskar grew 7% and Renault India posted over 7-fold growth to over 8,000 units in March, with its SUV Duster accounting for 70-80% of its sales.
And the story is not too different for two wheelers. The country’s largest two wheeler maker Hero MotoCorp posted a 11% decline in March selling less 4,68,283 units, TVS Motor Company too registered a de-growth of over 10% to 1,43,239 units. Honda Motorcycle and Scooters India and India Yamaha Motor recorded a sales growth of 14% and 20% respectively on the back on entering into new segments.
Lower plant utilisation and reduced shifts have become the regular feature and this hugely impacts industrial productivity, which has been suffering for long and that has direct impact on the commercial vehicle sales. Tata Motors posted higher ever domestic volumes this fiscal to 56,813 units, yet the sales were down 2.15% year on year. Eicher branded trucks and buses recorded sales of 4,962 units in March 2013, as compared to 6,051 units in March 2012, representing a decline of 18%.