Discounts, New Models Help Sell 2.5 L Cars
Car sales rise 4.5% in March; Maruti, Hyundai Motor India unit drive growth; wholesale volume estimated to have risen 7-8% ROUGH ROAD
New Delhi: Sales of passenger vehicles in the domestic market rose 44.5% to 250,000 units last month, driven by new models and year-end discounts offered by companies to push sales, initial industry numbers show. In the fiscal year ended on March 31, wholesale volume is estimated to have risen 7-8% to 2.7-2.8 million.
Industry growth last month, though, was largely driven by market leader Maruti Suzuki and the local unit of Korean rival Hyundai Motor. While Renault postead a more than two-and-half times increase in volume to nearly 12,500 units on account of the success of the small car Kwid and Mahindra & Mahindra recorded a sharp jump in sales, for the rest the market proved to be choppy.
In the last quarter of fiscal 2016, the passenger vehicle industry could post growth of just 2.2%, as the spurt in demand seen during the October-December festival period abated. In the three months through March, sales of passenger vehicles grew a mere 0.7%. Volume came largely from demand for new utility vehicles such as the Hyundai Creta, Maruti Brezza, Mahindra TUV300 and KUV100, as a deficient monsoon hurt demand for ent- ry-level passenger cars such as the Alto, Eon and i10 in rural areas. “Growth in the Indian automotive sector has not been up to the market potential, especially in the last three months,” said Abdul Majeed, partner at Price Waterhouse. “The reason for low growth is mainly due to the ban of bigger diesel vehicle (over 2000 cc) in the NCR belt. The other areas of concern continue to be lower off-take of new vehicles in the rural market, liquidity concerns and continued higher interest rates. The imposition of infrastructure cess in the latest budget added to the woes of the auto makers.”
Market leader Maruti, which posted record domestic-plus-export sales of 1.43 million units in the last financial year, managed to beat the blues with volume growing 14.6% in March. Sales grew across segments, except in small cars Alto and WagonR.
Executive Director for Sales and Marketing RS Kalsi said: “We introduced a totally different format of products, came out with new technologies like smart hybrid and automatic gear shift, focused on improved distribution, which helped us increase market share to 46.7%. This fiscal (year), too, we are looking at outpacing industry growth of around 7-8%.”