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Jan 2015 car sales positive despite excise rollback

Carmakers were an anxious bunch when the government decided to roll back the excise sops offered in the 2014 interim Budget. The cost of increased duties was passed on to customers and prices were hiked across the board. Most of the industry was resigned to a market slowdown and sales for the month of January 2015 were anticipated to be dull. However, numbers that individual companies have now put out, seem to speak otherwise. Most companies have posted positive growth with only a few registering lower sales than in January last year.
But manufacturers are still not upbeat about the market's prospects and all eyes are on the Union Budget that will revealed in about a month's time. The industry is hoping for reforms that will boost sentiment.  

Maruti Suzuki
With 1,05,559 units sold in January, India’s largest carmaker has recorded a 9.3 percent increase in its month-on-month sales (January 2014: 96,569). While Maruti’s bread-and-butter models which include the Alto and WagonR saw a 7.3 percent decline to 35,750 units (January 2014: 38,565), the UV segment saw the highest increase at 35 percent with 6,432 units sold (January 2014: 4,763). Sales for the compact car segment, which includes the Swift, Dzire, Ritz and Celerio hatchbacks, rose 7.5 percent to 45,881 units (January 2014: 42,669). While the Omni and Eeco combined sold 10,113 units, the Dzire Tour taxi sold 1,378 units in the month. The company’s latest model, the Ciaz sedan, sold 6,005 units in January 2015. For the April 2014-January 2015 period, Maruti sold a total of 8,51,662 units, which is a 12.6 percent growth over the corresponding period in the previous year.


Hyundai
The Korean manufacturer registered domestic sales of 34,780 units in January 2015. Rakesh Srivastava, senior vice-president (sales and marketing), said, “Hyundai Motor India sold 34,780 units in the domestic market with a growth of 7 percent over January 2014. This growth came in on the momentum built by products like the new Elite i20, Grand i10 and Eon while facing the stiff challenges of increasing cost of ownership on account of an increase in excise duties. For sustained growth, the need of the hour is reduction in interest rates and rationalisation of taxes to increase the inflow of the first-time buyers.”

Honda
Honda Cars India has registered monthly domestic sales of 18,331 units in January 2015, witnessing a growth of 17 percent (January 2014: 15,714). While Honda sold 7,671 units of the City, and 6,709 units of the Amaze, sales for the Mobilio MPV stood at 2,942 units. The company also sold 951 Brios and 58 CR-Vs. The Japanese carmaker also reported an overall growth of 47 percent during April 2014-January 2015 with 1,49,464 units as against 1,01,370 units in the corresponding period last year.

Tata Motors
The domestic carmaker’s passenger vehicles division recorded sales of 13,047 units, up 19 percent as compared to 10,974 units sold in January 2014. In a statement, the company said sales of the Zest sedan, launched in August 2014, has done well while the recently launched Bolt has received a good response as well. The company’s cumulative sales of all passenger vehicles in the domestic market for the fiscal year thus far are 1,05,274 units, down 8 percent over the corresponding period the previous year.

Toyota
Toyota has seen a 16 percent growth in the first month of the year. The company sold 12,650 units in the domestic market as compared to 10,910 units in January 2014. N Raja, director and senior VP (sales and marketing), said, “The growth of 16 percent is also credited to the launch of the new Innova and all-new Fortuner 4x4 AT, in early January.” However, he cautioned that “the effect of the increased prices on account of excise duty hike is still impacting the market. We hope the government will reconsider the excise duty concessions in the upcoming Union Budget to achieve sustained growth in 2015. In line with the Make in India campaign, structural reforms for the automotive sector are essential at this point in time.”

Mahindra
Mahindra reported total domestic sales of 18,804 passenger vehicles in January 2015, down 5 percent (January 2014 : 19,792) year on year. Pravin Shah, chief executive, automotive division, M&M, said, “The first month of 2015 has not been encouraging as the effect of withdrawal of excise duty subsidy is clearly evident. Unfortunately, the segmented recovery which we were witnessing over the last couple of months has been impacted with the excise duty change. We do hope that the upcoming Union Budget has some positive news for the auto sector.”

General Motors
GM India sold 4,667 vehicles in January 2015 (January 2014: 5,557), a fall of 16 percent. “The withdrawal of excise duty benefits has significantly affected demand during the previous month. High interest rates and weak economic fundamentals continue to put pressure on car purchases,” said P Balendran, VP, GM India. “The sector’s turnaround is possible only if interest rates are reduced in phases and government announces big-ticket reforms in the upcoming Budget to revive consumer sentiments,” said Balendran.

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