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Price rejigs put luxury cars on fast lane in India

Even as leading automakers saw a slump in sales last month amid dampening consumer sentiments over rising fuel prices and high interest rates, manufacturers operating in premium segments continued to post strong growth numbers on the back of price rejigs and newer launches.

The country's top three manufacturers - Maruti Suzuki India Limited, Hyundai Motor India Limited and Tata Motors - saw sales volumes drop by 26 per cent, 11 per cent and 38 per cent, respectively.

Among the niche manufacturers, General Motors, Nissan Motor India and Volkswagen managed to ride the tide with new launches.

Toyota Kirloskar Motors, which introduced sedan Etios in December 2010 and premium hatchback Liva in June this year, registered over 98 per cent of incremental volumes from the sales of the two models.

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Price rejigs put luxury cars on fast lane in India

"Our growth numbers are indicative of the increasing acceptance of Toyota vehicles in India. The response to Etios and Liva has been very good. Sales for the new Altis too grew by 22 per cent to 1,030 units," Deputy Managing Director (marketing) Sandeep Singh said.

For Volkswagen, too, sales went up by 151 per cent to 6,529 units, of which 6,353 units came from new cars - the premium hatchback Polo and sedan Vento.

The diesel variant of small car Beat shored up volumes for General Motors India.

While sales for all other Chevrolet models except the Tavera declined, Beat sales tripled to 5,255 units.

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Price rejigs put luxury cars on fast lane in India

"The growth was driven primarily by sales of the new diesel Beat. We are recording 80 per cent of sales for the car from the diesel version," GM India Vice-President P Balendran said.

The price rejig worked for Honda Siel Cars India.

"Honda cars are aspirational. Since the price repositioning we have been able to reach out to more customers as a result of which City sales have gone up considerably. The supply of components from Japan is also normalising, we are in a recovery mode because of which we have been able to make and sell more cars," Senior Vice-President (sales & marketing) Jnaneswar Sen said.

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Price rejigs put luxury cars on fast lane in India

HSCI had slashed prices of sedan City by up to Rs. 66,000 in June; the base version is now available at Rs. 7.49 lakh (ex-showroom, Delhi). Honda sold 4,092 units of the City last month as compared to 3,565 units sold in July 2010.

Among other major manufacturers, home-grown Mahindra & Mahindra reported 35 per cent growth in passenger vehicle sales at 17,312 units last month.

Arun Malhotra, senior vice-president (marketing), M&M said, "We have posted growth across all our brands, be it in passenger car or utility vehicles.

Verito sales have clearly been gaining momentum despite the tough market conditions. A lot of focus has gone into re-branding and marketing the car since it was completely taken over by Mahindra which is now paying off."

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Price rejigs put luxury cars on fast lane in India

The company sold 1,630 units of the sedan last month as compared to the 752 units sold in the same month last year. M&M's average monthly sales were 850 units in the previous financial year.

"The Reserve Bank of India has hiked lending rates 11 times over the past one year. This has translated into three percentage point increase in the interest rate on auto loans. Companies whose majority sales come from small cars have been hit the most, as the entry-level buyer has deferred purchases," said Abdul Majeed, leader, automotive practice, PricewaterhouseCoopers.