Demand for UVs, new cars drives sales in July; upcoming festival season raises hopes further - Economic Times

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NEW DELHI: July passenger vehicle sales have given the automobile industry something to cheer about, with several companies posting strong numbers for the month and the festival season just around the corner. With improved customer sentiment on the back of a good monsoon, steady interest rates and declining fuel prices, manufactures are optimistic that sales will pick up further in the second half of the year.

Though some manufacturers have yet to report the numbers, industry executives and experts estimate sales to have grown 8-10% last month. Demand was driven primarily by utility vehicles and newer models such as Maruti Suzuki Baleno and Vitara Brezza, Hyundai Creta, Toyota Innova Crysta, Mahindra KUV100 and Renault Kwid. Car sales still remained on the slow lane.

The country's largest car firm, Maruti Suzuki, posted growth of nearly 14%, selling 1,25,778 vehicles in July. The number was the highest ever recorded in a month by the company, which accounts for almost one of every two passenger vehicles sold in the country.

Though sales of passenger cars at Maruti Suzuki grew by a modest 2.2%, utility vehicles pulled demand. Sales of small cars Alto and WagonR dropped 7.2%; while those of compact cars Ritz, Baleno, Swift, Celerio and DZire grew just 4.1%. In the utility vehicle space, however, strong traction for the Vitara Brezza saw sales growing two-and-half times. Sales of utility vehicles at Maruti Suzuki last month, in fact, surpassed those at Mahindra & Mahindra, hitherto the market leader.

The local unit of Korean auto maker Hyundai Motor posted almost a 13% increase in sales at 41,201 units, helped by strong demand for models like the Grandi10, Elite i20 and Creta.

The performance led Rakesh Srivastava, its senior VP of sales and marketing, to make an upbeat prediction. "We are looking forward to closing the current ca lendar year with sales of half a million units as per our business plans," he said.

Homegrown auto major Mahindra & Mahindra, which has been going strong since the launch of the TUV300 and KUV100 SUVs, posted a 20% increase, selling 17,356 units. "The advent of a good monsoon so far has brought in positive sentiment for the economy and that is somewhat reflected in our performance," said Pravin Shah, chief executiveautomotive, at Mahindra.

Toyota Kirloskar Motor, which has customers waiting up to two months for the delivery of the new Innova Crysta multi-utility vehicle, pos ted a nearly 3% increase in sales at 12,404.

The Innova contributed more than 60% to sales at the local unit of Toyota Motor in July. The compa ny had 9,000 pending or ders for the vehicle at the end of the month. N Raja, director of sales & marke ting, said the performan ce could have been even better but for the restric tions on large diesel vehi cles, which "has stalled the extent of our growth".

While Renault, Nissan Motor and Ford Motor posted strong sales growth in India, at Honda Cars India, volume dropped nearly 25%.

Two-wheeler makers fared well, reflecting the improved sentiment that the monsoon rains have brought to the rural market.

Sales at Hero MotoCorp, the market leader, rose 9.13% to 5,32,113 units in the past month. At Royal Enfield, sales rose 31% to 53,378.

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