This may be the best time to buy a small petrol car. Buyers in India, the world’s second- largest small car market, are fighting shy of buying small cars. This is pushing manufacturers to offer mouth-watering discounts on these models and you could make a killing by buying these slow-moving models just now.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), small cars grew by just 0.68 percent in April, the lowest growth in a decade. Small cars are less than four meters in length and typically two box hatchback. Coming in this category are the Tata Nano, GM Spark and Maruti’s M800, Alto, A-Star and Wagon R, sales of which declined significantly during the month. The Spark saw the steepest year-on-year fall in sales (811 units against 3,887 units sold in April last year).
Nano also sold 8,028 units, about 2,000 units lower. Only the combined sales of Hyundai Santro and Eon registered an increase. Since small car buyers are the most sensitive to interest rates and increase in running costs (due to high fuel prices), they are postponing purchases, say SIAM officials. Increasing levies at the state level and the absence of any diesel option in these cars are other reasons why sales are suffering.
In contrast, mid-sized cars such as Hyundai Verna, Honda City, Maruti Dzire flew off the shelves last month. Overall, passenger cars grew by 3.4 percent last month. Utility vehicle sales were also on the fast track, posting a jump of more than 47 percent to 39,008 units (26,478 units) so that overall passenger vehicle sales (including cars, UVs and vans) jumped 9.3 percent.
Overall, vehicle sales were up 10 percent in April in the domestic market at 14,72,385 units (13,38,430 units), but exports remained an area of concern. Exports of cars, vans, medium and heavy commercial vehicles, light CVs, three wheelers and mopeds were in the negative territory.
SIAM officials say that with exports to Europe suffering in a big way, the overall export scenario is worrisome for the industry currently. The only silver lining was scooter exports (though small in actual numbers) which grew 55 percent to 9,600 units (6,230 units) and bike exports, which rose almost 8 percent to 183,292 units (170,412 units).
SIAM had, in the beginning of this fiscal, projected 10-12 percent growth in passenger vehicles and April sales are close to that target, showing 9.3 percent growth. But Director General Vishu Mathur forecast the first six months of this fiscal would see slow passenger car sales and that they would pick up only in the second half of the financial year.
Three wheeler domestic sales were down 5.3 percent because of registration restrictions imposed by various cities on passenger three wheelers; even motorcycle sales growth has plateaued over the last few months because of the rising cost of fuel.
Bike sales grew by just 6.5 percent in April against 23 percent a year ago, and their growth rate has been in single digits since December this year. But scooters shone through, largely on urban demand and launch of new products. Piaggio’s Vespa has just re-entered the scooter market and other model launches are also lined up.
It is interesting to note that Honda Motorcycle and Scooter India (HMSI) has come within kissing distance of well entrenched player Bajaj Auto – largely on the strength of its scooter success when Bajaj took a conscious decision to move away from scooters. So HMSI’s total domestic sales were 193,511 units this April, just about 7,000 units less than Bajaj’s 200,228 units.
Another interesting phenomenon in evidence now is the return of Honda Siel Cars India. The company was suffering from production and supply constraints for much of the past financial year, but now that things are back on track, its sales numbers have shown a very significant jump.
In fact, Honda Siel’s domestic sales at 7,075 units compared very favourably with sales of two American companies, Ford India (7201 units) and General Motors India (7,921 units). And that despite Honda not having a diesel option for any of its cars!