NEW DELHI: Passenger vehicle makers hoping for bumper festive season sales reported disappointing numbers for October, with high fuel prices and a rise in insurance costs hitting customer sentiment.
While commercial vehicles (CV) have done relatively better, sales in the segment have also been marginally impacted by the liquidity crisis affecting non-banking financial companies (NBFCs) and a consequent fall in vehicle financing.
Domestic sales of market leader Maruti Suzuki (MSIL) grew by only 1.5 per cent year-on-year in October, while rival Hyundai Motor (HMIL), backed by high demand for its new Santro, reported a 4.9 per cent growth.MSIL chairman R C Bhargava had recently said that this festive season might not see double-digit sales growth as fuel prices and an up to Rs 10,000 hike in insurance premiums has dampened consumer sentiments.
Rising fuel prices affected the less fuel-efficient utility vehicle (UV) segment, with MSIL’s UV sales contracting by 11.2 per cent. Likewise, top UV makers — Mahindra & Mahindra and Toyota Kirloskar — could only manage 3 per cent (24,066 units) and 2 per cent (12,606 units) sales growth respectively.
“We have been able to sustain good customer demand despite the dampening effect on consumer sentiment...,” N Raja, Deputy Managing Director, Toyota Kirloskar Motor said.
Honda Cars saw domestic sales growth remain flat, while Tata Motors (11 per cent) and Ford India (114 per cent) managed to buck the trend.CV sales, however, registered strong growth on the back of robust economic and infrastructure activities.
Tata Motors with a 22 per cent jump in domestic CV sales said, “despite the growth... being marginally impacted by the current liquidity crunch in the market, the industry is still upbeat... An early resolution to the liquidity crunch issue... will help sustain the growth momentum”.