Workers assemble a car at the Tata Motors factory in Pune in the Indian state of Maharashtra. Photo: AFP

Car sales in India in February were lackluster, with companies recording either marginal growth or a decline, and the only bright spot was the industry’s performance in rural markets.

Leading carmaker Maruti Suzuki India, a unit of Japan’s Suzuki Motor Corporation, which sells one out of every two cars in the country, recorded muted sales last month. It dispatched 136,912 units, as against 136,648 in the same month last year.

The country’s second-largest carmaker Hyundai Motors, a unit of South Korea’s Hyundai, reported a 1.6% decline in February. Its sold 54,518 units, while in the same month last year it was 55,422 units. Exports were, however, up 4.5% at 11,408 units as compared with 10,917.

Mahindra and Mahindra and Tata Motors recorded growth on the back of the launch of new models. With the recent launch of a compact sport-utility vehicle, the XUV 300, Mahindra and Mahindra posted a year-on-year 16% increase in dispatches at 26,109 units.

Fourth-largest carmaker Tata Motors also saw sales pick up during the month on the back of the newly launched Harrier. Dispatches at the Tata group flagship rose 2% to 18,110 units in February.

Metro sales down

In an ongoing trend, over the last 10 months the demand for passenger vehicles fell in metro cities and was moderate in small towns, but it remained strong in rural areas.

In the county’s four metropolitan centers – Delhi, Mumbai, Chennai and Kolkata – which account for 11% of India’s passenger-vehicle market, sales in the April-January period dropped between 4% and 12%. Six of the country’s top 10 cities in terms of vehicle sales also registered a decline.

Overall, passenger-vehicle sales grew 4.5% in the 10 months through January, but in non-metro markets, it was 7.5%, Economic Times reports.

In the metros the demand for cars and SUVs fell in the first 10 months of this fiscal year, as many consumers postponed or dropped purchase plans because of increasing congestion on roads and lack of parking space. The improvement in public transport options such as metro rail and increasing popularity of ride-sharing apps such as Uber and Ola also contributed to the weakening of demand in metro cities.

On the other hand, the rising presence of financial institutions in rural markets, offering credit at attractive rates, has helped bolster rural demand.

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