Don't cheer Maruti's July sales yet: Blockbuster Swift, Ertiga sales actually fell

New Delhi: A sharp decline in buyers of diesel cars has pulled down two major car categories for Maruti Suzuki India this July: the compact category which comprises Swift, Ritz and Estilo; and the Utility Vehicle category which comprises Gypsy, Grand Vitara and Ertiga. Sales of blockbuster models Swift hatchback and Ertiga are down significantly which is why the company has perhaps contained the dispatch of these two models to dealers in July. The numbers every automobile manufacturer declared every month are dispatches made to dealers, not actual sales to customers.

For July, Maruti saw compact segment decline by almost 12 percent to 13,882 units (15,759 units) whereas the UV segment fell 37.5 percent to 4,562 units (7,294 units).

The two segments have seen a decline in dispatches for many months because of the reluctance of buyers to go in for diesel cars when diesel fuel prices are rising every month. It is interesting to note that Maruti dispatched more Swifts and other compact category cars last July, when a deadly riot halted production of diesel Swift from 18th onward, than it has dispatched last month. The diesel market is slowing alarmingly.

In 2012-13 when the diesel cars were a craze, more than 6 in 10 buyers opted for diesel powertrains. This came down 58 percent and eventually 54 percent by the close of the fiscal. For Maruti, share of diesel vehicles has dropped from 38 percent to 36 percent last fiscal and continues to fall.

But surprisingly, the mini segment - which includes M800, Alto, A-Star and WagonR - has seen an increase of almost 16 percent to 33,587 units (28,998 units) because of Maruti’s sustained efforts at niche marketing. In the last few months, it has succeeded in selling more of its small cars, specially the M800 and the Alto, because of increased rural penetration and enhanced focus on addressing customer enquiries. Of course, heavy discounts on almost all the cars Maruti sells has also helped.

Even exports continued to be an area of concern, with shipments down by more than 27 percent to just 8,154 units (11,210 units) in July. This, despite Maruti actively developing non-European export markets in the last several months.

The Dzire sedan sold a third more, with sales up 33.6 percent to 15,249 units (11,413 units) but the SX4 sedan continued its downward spiral. It declined to less than half at 322 units from 679 units in the same month last year.

Vans, which means combined sales of Omni and Eeco, grew modestly by 9.7 percent to 7543 units (6879 units).

Maruti has already said it is expecting wholesale growth of 4-6 percent this fiscal on hopes that the market will revive in the second half. It has also indicated that in a bid to maintain inventory at optimum levels, it will continue to regulate dispatches so that cars do not pile up at dealer showrooms.