Auto sales stay muted in February on liquidity woes

NEW DELHI: Automobile sales remained tepid across most segments in India last month, reflecting the impact of tighter liquidity on purchasing decisions, with the industry eyeing this summer’s nationwide balloting and higher rural incomes for a revival in demand toward the latter half of the year.

Utility vehicles still outdistanced other categories of personal transport, with a new model giving traction to Mahindra & Mahindra’s (M&M) sales. Two other launches, Maruti Suzuki WagonR and Tata Harrier, also drew buyers, but the broader industry did not have much to cheer about in February.

“Auto sales are witnessing a temporary slowdown in the pre-election phase, in addition to factors such as tight liquidity conditions that have affected buying behaviour,” said N. Raja, deputy managing director, Toyota Kirloskar Motor (TKM). “Positive measures announced in the budget, given its thrust on the rural economy, would certainly boost buying sentiment in the subsequent months.”


Market leader Maruti Suzuki reported a nominal growth of 0.9% at 139,100 units.

Sales of mini cars Alto and the old WagonR declined 26.7%, but those of compacts — New WagonR, Celerio, Baleno, Swift, DZire, and Ignis — increased 11.4%. Wholesale volumes of utility vehicles — Ertiga, Vitara Brezza and SCross — rose 7.4%.

M&M fared better than peers, with its compact SUV model XUV300 drawing potential buyers. It sold 26,109 units last month, an increase of 17% on year.

“We have witnessed strong double-digit growth…in our UV portfolio on the back of our newly launched XUV300 model,” said Rajan Wadhera, president (automotive sector), M&M. Some industry experts believe that the industry should see better sales from March itself, considered a good month traditionally for auto purchases in parts of the country.

“We expect consumer sentiment to improve by the end of the month and gain pace in the third and fourth quarters of the calendar year,” said Zac Hollis, director (sales & marketing), Skoda Auto India.

Rival Tata Motors posted a growth of 2% to sell 18,110 units last month.

“…Despite the challenging environment last month, we witnessed a growth of 2%, fuelled by the good performance of our new-generation products,” Mayank Pareek, president (passenger vehicles business unit), Tata Motors, said. “The Harrier has been very well accepted…. and we are expecting higher volumes in the coming months as the production ramps up.”

Separately, sales of buses, trucks, and cargo carriers remained under pressure. Tata Motors saw commercial vehicle sales slip 5% to 39,111 units last month. At Chennai-based Ashok Leyland, sales climbed marginally to 17,352 units.

“The market continues to exhibit subdued demand on the back of high interest rates, and the lag effect of the implementation of revised axle load norms, resulting in a decline of 5% in CV sales volumes,” said Girish Wagh, president, (commercial vehicles business unit), Tata Motors.

In two-wheeler segment, TVS Motor Company posted a growth of 2%: Royal Enfield’s sales dropped 14% to 62,630 units in the period under review.