Indian domestic passenger car sales growth slowed down to single digit levels in 2005. The slowdown in sales was attributable to multiple factors including natural disasters in various parts of the country including floods. Other factors that had a negative impact on sales were the introduction of new stringent emission norms (Euro III) which led to an increase in vehicle costs and prices. Passenger car costs also increased due to increase in manufacturing input costs, mostly steel.
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Total Indian passenger car sales stood at 858,000 units against the 802,000 units sold domestically in 2004, representing an annual growth rate of 7% (annual growth was around 18% in 2004). Meanwhile, utility vehicle sales growth was slightly stronger at 8.9% as sales reached 187,000 units.
On the export front too, the industry managed to register only single digit growth rates. Export volumes were 173,000 units, 4.6% ahead of 2004. One explanation for a flatter export performance in 2005 lies in model cycles and a ‘mid-life crisis’ for most of the passenger car models being exported from India. The most important models being exported from India include the Hyundai Atos and the Suzuki Alto.
Passenger car market leader Maruti reported annual domestic sales of 380,763 units, an increase of 8.3% over 2004’s sales of 351,583 units. However, with the Alto reaching the downward slope of its lifecycle in the European market, Maruti’s exports took a hit with the company shipping only 26,659 units as compared to 37,958 units the previous year, a fall of nearly 30%. While the Alto – continuing to be the largest selling car in the country – remained a strong player for Maruti, the carmaker faced a challenging market for its cheapest offering – the 800 – and the Zen (older Alto bodystyle).
The newly launched Swift turned out to be a strong seller for the company with waiting periods stretching for up to six months, forcing the company to ramp up production. The success of the Swift boosted consumer interest in the segment and the previously slow selling Hyundai Getz also gained in sales.
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By GlobalDataThe slowdown in car sales was felt especially by Tata Motors as the domestic manufacturer saw sales stagnating. Cumulative sales of Tata passenger vehicles in the domestic market for the year were 127,510 units, an increase of 2% over the previous year. However, cumulative exports in the year 2005 at 35,205 units were up 82.4% over the corresponding figures for the previous year.
Hyundai Motors India had a strong 2005 with domestic sales of 156,291 units and growth of 11.8%. The company’s exports also saw a strong 27.2% increase at 96,560 units as the Indian plant started shipping the Atos small hatchback to various international markets.
The year was relatively strong for smaller players in the market, most of whom reported stronger growth in sales on the back of recently introduced models.
General Motors India reported an 18% sales growth in the year, clocking a total of 30,837 units as against 26,166 units in 2004. GM benefited from the strong sales of its multi-utility vehicle Chevrolet Tavera, which sold 18,622 units in the year against 8,471 units in 2004, growth of 121%. The Tavera benefited particularly from Toyota withdrawing the Qualis from the market, which made the Tavera one of the most attractive options for cab and fleet operators.
Toyota Kirloskar Motors withdrew the popular Qualis MUV from the market, launching the Innova (based on the IMV platform) in February. The Innova has since sold 32,000 units. Toyota’s other passenger car sales stood at 9,930 units.
Deepesh Rathore / Tilak Swarup
