Launch of new cars like Maruti Swift, Honda Brio, Hyundai Eon and Mahindra XUV, in the Indian automobile market, has led to a favourable growth in the sales of domestic cars in November. The market has not seen any encouraging results since June, as a result of rise in the price of petrol and high interest rates and purchasing costs.
According to SIAM (Society of Indian Automobile Manufacturers), around 1,71,131 cars were sold in November this year. Comparing with the sales of last year, there is an increase of 11,192 units. Automobile manufacturers such as Hyundai Motor India, Tata Motors, Mahindra & Mahindra, Toyota Kirloskar Motors and Nissan have seen a significant rise in their sales.
This year Hyundai Motor India recorded an increase of 3,460 units from last year, whereas the number of units sold by Tata was 28,774, as against 16,363 last year. However, experts feel that the encouraging sales figures in November were due to the new launches and the ascending trend would not be sufficient to negate this year’s slow growth.
Arvind Saxena, Marketing and Sales Director of Hyundai Motor India, said, “In a challenging market we have been able to grow volumes and market share on the strength of our new launches — Verna and Eon. Our immediate outlook on the market is not too bright as interest rates and fuel prices are unlikely to soften in the foreseeable future.”
Sugato Sen, Senior Director at SIAM, said “The market has seen better response from customers with higher sales in post-festive period. The bigger cars have largely remained insulated from the market slowdown and have improved demand. It's the entry-level small segment that has been hit the most because of fuel hikes and rising interest rates and has kept the market sluggish.”
There were quite a few reasons for the inadequate sales in the market. A couple of months ago, Maruti Suzuki India faced major problems with its workers. The manufacturing unit of Maruti Suzuki India in Manesar was shut down due to a strike by the workers. Hence, Maruti's sales went down by 19% in November and moreover, the market condition does not seem very positive at the moment.
"We may not be able to reach the production of last fiscal due to this strike and slowing demand, as we have to tweak out manufacturing operations in tandem with market conditions," Maruti Suzuki chairman R.C. Bhargava said.
SIAM at the beginning of this financial year had predicted that the sales would increase by about 14% to 16%. However, looking at the current scenario, SIAM is expected to slash the growth rate assumption. Till November this year, the sales have dropped 3.53% to 1.2 million units.
Thus, the increase in sales of November is not sufficient to improve the condition of the automobile market. As a matter of fact, majority of the Indian buyers take loan for buying a car. Reserve Bank of India has raised the interest rates many times, since the past one and a half years that has also affected the car sales negatively and added to the woes.
