Slow climb ahead for auto companies

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SME Times News Bureau | 03 Nov, 2014
Though the economic sentiment is positive it has not translated into hard sales numbers for India's automotive industry due to factors like high interest rates, industry officials said Saturday, referring to last month's sales numbers.

On the other hand, car exports have come down for companies like Maruti Suzuki India and Ford India.

It is a mixed bag for domestic vehicle makers with some logging growth last month over corresponding month in 2013 and while some registering degrowth.

"Macro-economic indicators suggest a gradual recovery in the economy," said Anurag Mehrotra, executive director, marketing, sales and service at Ford India.

"But the positive customer sentiment is yet to translate into vehicle sales, potentially due to high interest rates and inflation," he added.

"Even though the lower fuel prices are encouraging, the market is not showing any movement apart from new entries. Even the festival season did not bring the expected momentum in the market. The turnaround of the automobile sector is still not visible in the short-term," P. Balendran, vice president, General Motors India, said.

"Industry needs the lower excise duty benefits to be extended till budget and beyond with additional stimulus package in the next budget to boost the overall manufacturing sector, create additional employment opportunities and improve its contribution to GDP," he added.

General Motors India sold 4,263 vehicles in October against 7,715 units sold in the corresponding period last year -- a drop of 44.74 percent..

Last month Ford India sold 11,630 vehicles in combined domestic wholesales and exports compared to 14,935 vehicles sold in the corresponding month last year.

October exports saw 4,907 vehicles sold against 5,772 vehicles a year ago, while domestic wholesales stood at 6,723 vehicles compared to 9,163 units sold in the same time period last year.

India's passenger car market leader Maruti Suzuki India sold 103,973 units last month down from 105,087 units sold in Oct 2013.

The company sold 97,069 units in the domestic market last month, up from 96,062 units sold in Oct 2013.

The company's total sales was pulled down due to lower exports last month. It shipped out 6,904 units last month as against 9,025 units exported during the comparable period last year.

Maruti Suzuki's sales dipped in the volume segments (Alto, WagonR, Ritz, Celerio, Swift, Dzire).

However, the company's sales of mid-sized car Ciaz zoomed to 6,345 units last month up from 262 units sold in Oct 2013.

According to Maruti Suzuki, owing to limited working days last month the availability of vehicles was hampered.

In exports, shipment of around 1,000 units to Algeria and Egypt was rescheduled to November 2014 due to cyclonic conditions in Gujarat area, the company said.

Tata Motors too reported a decline of 17 percent in its total sales last month as compared to Oct 2013 figures.

The company said its total sales, including exports, of commercial and passenger vehicles last month stood at 42,819 units as against 51,638 units sold in Oct 2013.

The company's domestic sales of commercial and passenger vehicles last month were 38,760 units down from 46,926 units sold in Oct 2013.

The decline was largely as the market continues to remain challenged by macroeconomic trends. While segments such as medium and heavy commercial vehicles (M&HCV) showed a 30 percent growth year-on-year, other segments such as the light commercial vehicles (LCV) sales continues to remain impacted by stringent financial rates and low consumer sentiment, Tata Motors said.

Toyota Kirloskar Motor (TKM) sold 12,556 units in Oct 2014 in the domestic market as compared to 13,162 units in Oct 2013. "We have maintained the sales volumes as Sept, in the domestic market and hope to see growth in the next two months," N Raja, director and senior vice president, sales and marketing, said.

The other Japanese car company that logged negative sales growth last month was the Nissan Motor Company selling 774 units lower than the 4,880 units sold in Oct 2013.

However, two and three wheeler maker TVS Motor had positive news to share. The company's sales last month went up by 22 percent to 241,044 units as compared to the numbers logged in Oct 2013.

Similarly Eicher Motors also announced 47 percent sales hike for its Enfield range of heavy two wheelers.

Last month the company sold 26,039 units up from 17,659 units sold in Oct 2013.