Floods slow down car sales in 2005

New Delhi: Floods all over the country - Mumbai, Gujarat and Chennai - coupled with high fuel prices and stricter emission norms, which have added to car prices, have taken a toll on sales of four-wheelers — passenger cars, SUVs, MUVs commercial vehicles in the country in calendar year 2005, though the decline in sales growth has come down compared to 2004.

According to the year-end figures released by the Society of Indian Automobile Manufacturers (SIAM), total car sales in 2005 stood at 8.58 lakh units against 8.02 units in 2004. Sales growth of utility vehicles and multi-purpose vehicles also fell to 8.9 per cent and 3.5 per cent respectively from 25.3 per cent and 11.6 per cent in 2004. Sales growth of commercial vehicles fell to 9.04 per cent in the year under review from 28.3 per cent in 2004.

CRISIL had forecast at the beginning of the year that growth of car sales in 2005 would not match those in 2004 due to an already very high base.

Companies that showed a good sales growth in 2005 year include General Motors India, Toyota Kirloskar Motor, Skoda Auto India, Toyota Kirloskar Motor Hyundai Motor India and Maruti Udyog.

GMI's sales rose 18 per cent in 2005, due to strong demand for its Chevrolet Tavera multi-utility vehicle. The company sold 30,837 vehicles over the year, compared to 26,166 in 2004. Sales of the Tavera sales grew 121 per cent to 18,622 units in 2005. Tavera sales have mainly grown as it has gained a major chunk of the taxi market especially after Toyota phased out its rival Qualis.

GMI makes the Tavera, Corsa and Corsa Sail at its facility in Halol in Gujarat and imports the Forester and Opel Vectra. GM is looking to corner 10 per cent of India's car market by 2010. The Halol plant has a capacity of 60,000 units a year, which will be raised to 85,000 in 2006.

SkodaAuto India achieved sales of 909 units in November 2005, up 65.5 per cent as compared to 549 units in November last year. In December SkodaAuto reported sales of 789 vehicles, a 56 per cent increase over the same period in 2004. The company's total sales in the year 2005 stood at 8,953 units, a growth of 25 per cent over the 7,202 units sold in 2004. SkodaAuto enjoys a market share of over 25 per cent and is targeting sales of close to 25,000 units this year.

Toyota Kirloskar was another carmaker that had a great year in 2005 having sold more than 2-lakh vehicles by November 2005.

While it took the company around four years to sell the first one lakh cars, it sold the second lakh in half the time. The numbers are doubly impressive considering that the company does not have a small car in its portfolio in India. Toyota's success is largely due to the sales of its MPV Innova, which has sold around 27,000 units since its launch. Toyota's other model Corolla is also a best seller in its segment with a market share of 32 per cent.

Nearly all the carmakers saw sales pick up substantially in December after the rainy season.

Maruti Udyog sold 46,079 cars in December 2005, up 5.1 per cent from 43,828 units a year earlier. The company's export performance was disappointing and it sold 43,251 cars in the domestic market, up 16.4 per cent against 37,153 sold in December 2004.

Its exports fell 57.6 per cent to 2,828 units from 6,675 units a year ago due to declining sales of the Alto in Europe. MUL's domestic sales were good due to the excellent performance of premium compact car Swift, Alto, Wagon-R, and Zen whose sales grew 36.6 per cent to 28,367 units.

Demand for the new Swift launched in mid-2005 well exceeds supply and the company recently boosted production to shorten the lengthy waiting list.

Tata Motors' domestic passenger vehicle sales rose 35.4 per cent to 13,037 in December. The Indica hatchback sold 6,977 units, a year-on-year increase of 40 per cent.

Hyundai Motors remained a low performer even in December. The company posted a 19- per cent decline in December 2005 to 15,973 vehicles compared with the 19,929 sold in December 2004. According to the company the decline in sales was primarily due to a high base in December 2004 which came on the back of a popular sales promotion scheme.

Honda Siel Cars India Ltd reported a 58 per cent jump in sales during December 2005 at 4,113 units as compared to the same month a year ago. The flagship model, Honda City, managed a tally of 3,766 units in December 2005, a growth of a 71 per cent over the corresponding month in 2004.

The month of October and November were bad for car companies in India. In November 2005 domestic passenger car sales dipped 2.3 percent from the same month a year earlier as potential buyers delayed purchases towards the end of the year.

According to SIAM 68,840 cars were sold in November 2005 compared with 70,468 units in November 2004, and 79,403 units in October 2005.