Despite manufacturers offering deep discounts, sales of passenger vehicles in India recorded the lowest growth in the past five years, with the top five car makers either recording a decline in sales or modest single-digit growth in March.
As a result, this fiscal year’s passenger vehicle sales, estimated at around 3.4 million units, grew less than 3% over the previous year’s figure. Industry body Society of Indian Automobile Manufacturers’ (SIAM) had earlier in the financial year projected growth of around 10%, but later in October lowered it to 6%.
After September, sales were sluggish due to new insurance regulations driving premiums up more than two-fold and because of the rising cost of vehicle finance.
The commercial vehicle segment also saw companies registering falling sales, with management attributing this to liquidity tightening, higher interest rates, and revised axle load norms.
Domestic sales of India’s largest car maker, Maruti Suzuki, declined marginally to 147,613 units in March, with sales of entry-level cars such as the Alto and Wagon R plummeting by about 55%. However, sales of compacts, midsize sedans, and utility vehicles registered growth in March.
In the last financial year, the company’s wholesale volumes shot up 6.1% to a record 1,753,700 units, its seventh straight year of growth, buoyed by strong gains during the beginning of the current fiscal year.
Hyundai Motor India’s sales in March fell 7.6% from a year earlier to 44,350 units, although sales for the fiscal year grew 1.7% to 545,243 units.
At Tata Motors, local sales in March dropped 12% to 17,810 units. For the fiscal year, however, numbers were up 12% at 210,143.
Honda Cars India bucked the trend by posting sales growth of 27% in March with monthly domestic sales reaching 17,202 units, compared with 13,574 units in the corresponding month last year. For the fiscal year, the company recorded sales up 8% to 183,787 units, compared with 170,026 units in the last fiscal year.
SUV maker Mahindra and Mahindra registered a marginal growth of 1% in total sales for the month of March 2019 with 62,952 units, compared to 62,076 units in March 2018. The company, however, recorded an 11% increase in vehicle sales for the current fiscal year at 608,596 vehicles, compared with 549,153 vehicles during the previous fiscal year.
Toyota Kirloskar Motor’s sales for March remained flat with a growth of 0.9%. It sold 13,662 units compared with 13,537 units during the same month last year. However, the company recorded an annual growth of 7% this fiscal year, selling 150,525 units compared with 140,645 units during the previous year.
Market analysts have attributed lackluster sales to a tightening of liquidity, the rise in insurance premiums and consumer uncertainty ahead of the general elections, which will begin on April 11. Automakers expect the demand to pick up after the election results are declared on May 23.
Another trend being noticed is that of falling demand for cars in metropolitan areas. Increasing traffic congestion, shortages of parking spaces, improvements in public transportation and the rise in popularity of ride-hailing cabs such as Uber and Ola have reportedly contributed to this trend.