Expecting a revival in auto sales in the upcoming festive season, carmakers have launched three new passengers vehicles (PVs) — Hyundai Grand i10 Nios, Maruti Suzuki XL6 and Kia Seltos — in this week. These companies hope their launches will reverse the contraction in the market pushing car sales up.
“The festival season might be a great opportunity for Hyundai and other carmakers in terms of recovery of demand and revival. Even as customer sentiment is subdued, we are preparing interesting customer communication programmes,” said SS Kim, MD and CEO, Hyundai Motor India on the sidelines of Grand i10 Nios launch.
Kim said the slowdown in the Indian market is very much cyclical and not structural, adding India still has huge growth potential as the number of cars sold per 1,000 people is very low compared to developed economies such as the US, China and South Korea.
Meanwhile, French carmaker Renault, which is eyeing a turnaround in the Indian market, has announced launching its new vehicle Triber on August 28.
India’s largest carmaker Maruti Suzuki India Ltd (MSIL), which on Wednesday launched a brand new 6-seater multi purpose vehicle XL6, feels demand is likely to go up in the upcoming festive season. “We are concerned that the market is falling at a double-digit figure. I expect the new product launches will improve sentiments,” said Kenichi Ayukawa, MD, MSIL, even as the firm registered 36 per cent decline in July sales Y-o-Y.
With the Onam festival in the southern part, followed by Ganesh Chaturthi in the western and several upcoming festivals in the northern India, the MSIL has seen an uptick in number of queries, especially for petrol variants. “There would be an uptick, but it’s difficult to say when there would be a pick up,” said the company spokesperson.
The Indian auto industry is going through one of its worst phases, with PV sales registering its steepest decline in nearly two decades in the April-June quarter, underscoring the subdued consumer sentiment, a slowdown in economic activity, liquidity issues and farm distress. The slump continued in July, PV sales fell 31 per cent to 200,790 vehicles compared to same period last year.
The month of July also witnessed the ninth straight drop in monthly wholesale PV sales. While almost every segment in the PV market has registered significant decline, demand for new launched utility vehicles has managed to weather the storm.
For example, Hyundai said it has received over 55,000 bookings for Venue in last three months, which helped it to improve its market share in July to 19.4 per cent. Kia Motor, which launched its fist vehicle - the SUV Seltos, in the India market on Thursday at an aggressive starting price of `9.69 lakh said it has received record 320,35 bookings for Seltos so far, setting a new benchmark for the mid-SUV segment.
However, the industry feels new launches might not be enough to revive demand and there is a need for stimulus from the government, including GST rate cuts. “If the government helps at this stage, I believe the recovery can happen this year itself,” said Kim, Hyundai India.