Maruti, TVS, Tata Motor slip as April sales stay sluggish

Moneycontrol Bureau

Automakers' cup of woes have continued into the new financial year, with most companies reporting yet another month of sales decline. Among the companies that reported their sales figures on Wednesday, Maruti Suzuki, Tata Motors and TVS Motor were trading down 0.5-2 percent on Thursday morning. Hero MotoCorp, Mahindra & Mahindra were up around 1 percent.

India's largest passenger car maker Maruti Suzuki saw marginal domestic sales growth (total sales including exports declined 3 percent to 97,302 units) in April.

Even top utility vehicle maker Mahindra & Mahindra only registered a 2 percent year-on-year sales growth last month, as the hike in excise duty in the Union Budget dented consumer sentiments, in a segment, which last year had stellar growth on the back of several new launches and buyer preferences shifting to compact UVs from premium hatchbacks and sedans.

Several others like Tata Motors, Toyota Kirloskar, Ford and Hyundai saw few takers for their vehicles in the domestic market.

Passenger car sales in India have been hit over the last one year amid the overall economic slowdown, high inflation, rise in fuel prices and expensive loans. Except for few vehicles, launched in the last 1-1.5 years, like Maruti's Ertiga multi-utility vehicle, compact DZire, Renault Duster, others have found few takers, despite heavy discounting and promotions across the industry.

Renault and Honda, meanwhile, saw brisk sales helped by recent launches like Scala, Duster, Brio and Amaze (Honda's first diesel offering in India).

Passenger car sales fell 7 percent in FY13, the first such decline in more than a decade, according to Society of Indian Automobile Manufacturers. It is expecting only 3-5 percent growth in FY14.

Among the two-wheelers, Honda Motorcycle & Scooter India (HMSI) continued to set a good pace in April, even as its erstwhile partner and India's largest player Hero MotoCorp continued to see sales slip (April sales down 10 percent). TVS Motor too saw its sales decline 6 percent in the domestic market, last month.

HMSI has become aggressive over the last one year, and has launched new entry level motorcycles taking Hero's Splendor head on. It recently started marketing a new fuel effecient technology for its scooters, including the best selling Activa, which promises a mileage of 60 kms in a litre of petrol.

HMSI has long said its aim is to dislodge Hero and become the largest two wheeler company in India. TVS recently forged a tie-up with Germany's BMW Motorrad to make a new range of motorcycles, first of which is expected to be launched in 2015.