Subdued demand conditions of the last several months continued in March for the auto industry, with most manufacturers reporting flat to negative sales during the month despite dealers offering mouth-watering discounts.
The reluctance of banks to lend, rising fuel prices, increase in product prices by manufacturers and negative buyer sentiments were some reasons why the demand refused to pick up.
The passenger vehicle (PV) industry was expected to grow at 8-10 percent during FY19, as per the Society of Indian Automobile Manufacturers (SIAM). However, growth is likely to be less than half of that. A clearer picture will emerge later in the month when SIAM releases the detailed data.
Discounts and consumer benefit schemes ranging from Rs 15,000 to 1.4 lakh were doled out during the month without much success. Consumers remained unenthusiastic about offers, including gold coins, exchange offers and overseas holidays.
Maruti Suzuki, India’s largest car maker, recorded a 0.7 percent fall in domestic sales during March to 147,613 units despite incremental sales coming from two new models. This is the first drop in domestic sales for the market leader in seven months.
New models of Wagon R and Ertiga helped boost sales during March, however, an inconsistent demand for Alto, Ciaz, Swift, Baleno and Ignis hurt overall sales. Maruti Suzuki, with a sales decline of 0.7 percent in March, did better for the year, clocking 6 percent growth in domestic sales in 2018-19 at 1.75 million units.
Sports utility vehicle specialist Mahindra & Mahindra that had the benefit of three new models, recorded a 4 percent rise in the domestic sale of passenger vehicles in the domestic segment. The Mumbai-based maker of Scorpio and Bolero recorded sales of 27,646 units during March. During 2018-19, M&M clocked a growth of 2 percent to 254,701 units.
M&M introduced three new models, XUV 300, Marazzo and Alturas, during the last two quarters. Rajan Wadhera, President, Automotive Sector, M&M said, “We have closed FY-19 with robust double-digit growth of 11 percent at an overall level, despite strong headwinds faced by the Indian automotive industry this year. This growth has been supported by our three new product launches, which have been well received in the market.”
Bengaluru-based Toyota Kirloskar recorded a growth of 2 percent to 12,818 units in the domestic market during March. “Consumer spending has weakened in the pre-election phase and the business sentiments have dampened temporarily. We expect the business conditions to improve in the months ahead - post elections and government formation,” said the company in a statement. For the financial year, the company's sales were up 7 percent.
Honda Cars India, the country's fifth-largest carmaker, recorded 27 percent growth in March in domestic sales to 17,202 units. For the year, the company clocked a growth of 8 percent to 183,787 units. Honda recently reintroduced the Civic in India.