Car sales set to touch double-digit growth

After a low single-digit sales growth in June, the domestic passenger vehicle (cars, utility vehicles and vans) industry is expected to have roared to a double-digit growth of 12-14 per cent in July.

In June, the low growth of 2.7 per cent was a result of production loss at Maruti Suzuki. The July growth may have been driven by a higher-than-normal volume from the country’s largest carmaker as it tried to recover some of its June losses. Growth may have also come from strong sales performance by other top players like Hyundai, M&M, Tata Motors and Toyota. Companies will officially announce July data on Monday.

Maruti saw a strong domestic sales growth of 13 per cent in April-May period. The company, however, saw a decline of 10 per cent in June sales as it lost production because of disruption in supply of air conditioning components and a six-day maintenance shutdown. One day’s production loss is estimated at 5,000 units. The impact of Maruti’s performance in June was visible on the entire industry as the market leader commands a 46 per cent share in the PV market. The company was expected to post a growth of 14-15 per cent in July, helped by strong pull for its bestsellers like Baleno and Brezza.

Industry watchers said the June volumes have got shifted to July because of Maruti. “Maruti is likely to partly recover the June production loss and will drive industry’s overall performance. Other factors like the revised salary of government employees are helping the overall industry demand,” he said.

Like the past few months, July growth may have been driven by the compact utility vehicles.

With a better sales performance, the industry’s April-June growth of 6.66 per cent was also set to improve.

Hyundai, the second largest carmaker was expected to continue its double-digit sales growth in July. It had grown its domestic sales by 10 per cent in the June quarter on the back of strong demand for models like Creta and Elitei20.

Among other players, M&M was likely to report a healthy growth, thanks to demand for models like KUV100. Japanese auto major Toyota, which was hit because of Supreme Court’s ban on diesel vehicles of 2,000cc and above in National Capital Region, was banking on the success of newly-launched Innova Crysta for double-digit growth. Tata Motors might also report growth, helped by its new hatchback Tiago. Ford might also report a double-digit growth.

French carmaker Renault, which has seen several months of triple-digit growth after it stormed the small car market last year with Kwid, might also post strong growth in July. Its alliance partner, Nissan, might also show a double-digit growth on the back of its new product, Redi Go. Some, however, were likely to post decline. The list includes Honda, General Motors and Fiat.