Bearish consumer sentiment exacerbated further by the steepest ever petrol price hike last week singed car sales in May, as companies struggled to get buyers to the showrooms.
Market leader Maruti Suzuki reported an over 4.5% drop in sales at 89,478 units. The decline in entry level small cars like M800, Alto, Wagon R, Estilo and A-Star, that are only available in petrol, was steeper at nearly 30% that more than negated the incremental numbers that Ertiga brought in.
The performance of the other two big firms — Hyundai and Tata Motors — were equally sobering, even though they managed to grow over last year. Hyundai recorded a near 3% growth at 32,010 units while Tata posted a 5.7% increase at 20,503 units.
“The recent hike in petrol prices has depressed market sentiment, with the macro-economic indicators providing no cause for cheer, the demand outlook doesn’t look very bright,” said Arvind Saxena, director (sales and marketing), Hyundai Motor India Ltd.
The two big American carmakers — General Motors and Ford — saw one of their worst months in the recent past with sales sliding by 27% and 14% respectively.
The high differential in the cost of petrol and diesel, with the latter now cheaper by almost R32 per litre in Delhi, however, had the desired effect. Companies with diesel-heavy portfolios like Toyota and Mahindra and Mahindra saw sales gallop at a searing pace.
The Japanese carmaker saw its sales jump by 107.5% while M&M witnessed a 24.2% increase. Toyota also benefited from the low base effect of last year when its production was hampered due to the massive earthquake and tsunami in Japan.
“Etios, Etios Liva, Innova and Fortuner continue to show good results because of high customer confidence,” said Sandeep Singh, deputy managing director-marketing, Toyota Kirloskar Motor Ltd. “The sales have been good, despite the low market sentiments.”Two-wheeler companies also registered a surprisingly healthy rate of growth with Hero MotoCorp reporting a 11% growth while erstwhile partner Honda saw a 52% jump helped by the introduction of its cheapest motorcycle till date — Yuga.