Few Bright Spots in March for India Vehicle Sales

MUMBAI – Mahindra & Mahindra and Toyota provided glimmers of positive news in an otherwise dismal March for most of India’s major auto makers.

Sales figures provided by each manufacturer showed market leader Maruti Suzuki absorbed the least damage, as deliveries declined 4.8% year-on-year to 119,937 units.

Tata fared the worst, with sales tumbling 66.6% from like-2012 to 12,347 units. Ford India plunged 41.6%, General Motors India dropped 14.9% and Hyundai India fell 13.5%.

Mahindra reported an 11.2% improvement to 49,275 units last month. India’s No.3 auto maker trails second-place Tata by a wide margin this year but is closing that gap: Mahindra light-vehicle sales were 59.8% of Tata’s total in 2011 and 66.5% in 2012, WardsAuto data shows.

Toyota’s March deliveries increased 6.8% to 19,452 units. “Despite a slowdown in the market, we have registered growth, mainly due to customer acceptance of the new models Etios and Etios Liva,” Deputy Managing Director Sandeep Singh tells WardsAuto.

Combined sales of Tata’s Nano subcompact, Indica hatchback and Indigo sedan fell short of 8,900 units last month. Nano deliveries alone totaled 10,475 in March 2012.

Hyundai’s struggles are linked to a shrinking export market. Over the past four years, the No.4 auto maker’s exports as a share of total sales have dropped from 90% to 61%. “We foresee that pressure on volumes will continue until there is significant improvement in macroeconomic factors,” Vice President Rakesh Srivastava says.

One such factor, short-term lending rates, were reduced last month by the Reserve Bank of India, but that action drew a lukewarm response from the auto industry. “The 25 basis points (0.25%) cut is nothing, as we need at least a 100 basis points (1.0%) reduction,” says Sugato Sen, deputy director general-Society of Indian Automobile Manufacturers.

Despite falling sales, Hyundai and Honda are hiking vehicle prices to offset the rising cost of onboard diagnostic compliance changes. Hyundai says its increases range from Rs575- Rs2,830 ($10-$50), while Honda, India’s No.9 auto maker, is boosting prices between Rs1,000 and Rs10,000 ($18-$185) across models.

Although minuscule, sales of luxury vehicles ran counter to March’s overall slump. According to industry estimates, deliveries of all high-end makes totaled 750 to 800 units, more than double the monthly average of 300 to 350.

The luxury auto makers are hoping to maintain sales growth into 2014, despite planning steep price increases of some imported completely built-up vehicles.