Car sales: Maruti Suzuki posts jump in volumes as Baleno, Vitara Brezza, Dzire demand grows; Hyundai comes in second

Wholesale volumes of passenger vehicles witnessed a healthy double-digit growth of 14% in November, with 2,75,417 units being sold by automakers. The low sales base in November last year owing to demonetisation aided the year-on-year performance. Leading the charge with a steep 45% rise to 77,824 units was the utility vehicles group, which grew at its fastest pace this fiscal – riding on the back of several new launches during the festive season. According to data released by the Society of Indian Automobile Manufacturers (Siam), sales of passenger cars during November grew at a relatively unimpressive 4.5% year-on-year to 1,81,395 units. The lacklustre performance seems to signal a shift in consumer preference towards sports utility vehicles from hatchbacks and sedans. During the month, the country’s largest passenger vehicle maker, Maruti Suzuki, posted a 14.3% rise in volumes to 1,44,297 units on continued strong demand for the Baleno, Vitara Brezza, Ertiga and the new Dzire. Hyundai posted a 10% growth to 44,008 units following positive response to its next generation Verna, and strong demand for the Creta, Grand i10 and Elite i20. Mahindra and Mahindra said its utility vehicle wholesale volumes grew 20% to 14,958 units.

November is usually a slow month for retail car sales, as customers wait for year-end discounts that are given in December by OEMs to clear inventory. And given that most passenger vehicle makers have indicated that they will increase prices from January, a historical trend, December sales should get a boost. This will help automakers end the calendar on a positive note. Tata Motors has indicated that it will be hiking prices of its passenger vehicles by up to `25,000. Toyota will also raise prices by around 3% for its entire range. Other passenger vehicle makers are planning to increase prices by 2-3% on various models.

In the two-wheeler segment, the start of the wedding season helped sales grow at a healthy 23.5% to 15,35,277 units during November, compared to the same period last year. Within two-wheelers, scooters grew at a faster 30% to 5,06,267 units, thanks to the rising demand for automatic scooters. Honda Motorcycle and Scooter India (HMSI), the leader in automatic scooters, posted a strong 44% growth in domestic sales to 2,99,414 units. Hero MotoCorp clocked 6,05,270 units in the month, registering a healthy growth of 26%.

Medium and heavy commercial vehicles, too, witnessed bumper sales in November with a growth of 62% to 28,459 units. This points to continued recovery after the change in emission norms in April and the implementation of the goods and services tax (GST) caused a sharp decline in volumes. Total automobile sales rose by 24% year-on-year to 19,39,671 units during the month under review.

In November last year, automobile sales, save for passenger vehicles, had collapsed due to the government’s decision to ban high denomination currency notes. Two-wheeler sales, which rely heavily on cash purchases, had seen a decline of 5.8% then. This year’s strong showing in the month needs to be viewed in this context. The growth from April to October this year has been a far more timid at 7.8% for passenger vehicles.