Maruti, Hyundai post strong growth in December

Withdrawal of excise duty benefit will have negative impact

Even as major car makers such as Maruti Suzuki and Hyundai Motor posted double-digit growth in domestic sales in December, the Centre’s decision not to extend excise duty benefits has put the industry on the back foot.

As an interim measure to give a boost to the struggling automobile industry, the government had announced a cut in the range of 4 to 6 per cent in excise duty on various vehicles.

Hike in prices

While most of the players have already announced plans to hike prices due to increasing input costs, with the concession lapsing, the quantum of price rise could be over Rs.20,000 for small cars and around Rs.40,000 for sedans.

Country’s largest car maker Maruti Suzuki reported a 13.3 per cent year-on-year increase in domestic sales at 98,109 units in December 2014, while Hyundai Motor India’s sales were up 14.7 per cent at 32,504 units. Toyota Kirloskar Motor (TKM) said it sold 11,740 units last month, a growth of 10.25 per cent.

“In continuation of the November upswing, we have registered growth in the domestic and overall sales in December as well. This momentum can be attributed to the year ending,” Toyota Kirloskar Motor Senior Vice-President (Sales and Marketing) N. Raja said.

On the other hand, Mahindra & Mahindra’s vehicle sales declined by 7 per cent to 34,460 units. The company, however, reported growth of 5 per cent in sales of passenger vehicles, including Scorpio, XUV 500, Xylo, Bolero and Verito.

“We are happy to have achieved a growth of 5 per cent in our passenger vehicle segment in December with 2014, an immensely challenging year for the auto industry,” M&M Chief Executive (Automotive Division and International Operations) Pravin Shah said.

General Motors India reported a 36.56 per cent decline in sales at 3,619 units in December. “Demand continues to remain suppressed on account of high interest rates and weak economic fundamentals. The withdrawal of excise duty benefits is also a big jolt for the automobile industry,” General Motors India Vice-President P. Balendran said.

In the two-wheeler segment, market leader Hero MotoCorp reported a marginal rise of 0.21 per cent in sales at 5.26 lakh units in December 2014. Chennai-based TVS Motor Company said domestic two-wheeler sales stood at 1.57 lakh units last month, up 18.67 per cent.

Royal Enfield reported a 47.78 per cent increase in domestic sales in December at 28,179 units as against 19,067 units in December, 2013.