5 cars that can help auto industry to recover

Vehicle manufacturers have over the last few weeks seen a steady rise in demand.

Almost every new car launched in recent months has sold well. Demand for the Maruti Celerio, Honda City, Hyundai Xcent, Nissan Terrano and Datsun Go, most of which were launched in 2014, has been climbing.

Maruti Suzuki had over 35,000 bookings for the Celerio in two months while Honda sold nearly 24,000 of its premium sedan, City, in three months.

Hyundai’s compact sedan, the Xcent, is expected to sell 8,000 by the end of this month, according to industry sources.

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Datsun, an affiliate brand of Japanese major Nissan with no prior experience in India, has sold over 2,500 and has another 4,500 bookings for the Go.

Nissan’s Terrano sports utility vehicle, launched in October, has sold nearly 15,000, or 40 per cent of the company’s total sales in 2013-14.

Jnaneswar Sen, senior vice-president (sales and marketing) Honda Cars India, said, “The response for the City has been encouraging. We are expecting the momentum to continue.” The waiting period for the automatic manual transmission Celerio has now reached eight months despite it being Rs 35,000-40,000 costlier than the manual version.

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“We reduced discounts by Rs 5,000-10,000 across the entire range (of cars) last month,” said a Maruti Suzuki dealer in Mumbai who did not wish to be named.

Collective sales of cars in the last two years has slipped by 12 per cent to 1,786,899 units as of March 2014 against 2,031,306 units recorded in March 2012.

The demand for commercial vehicles might have started to rise with dealer discounts on trucks moderating.

Truck sales in 2013-14 were the worst in a decade. Credit rating agency Icra estimates truck makers were offering discounts of 15 per cent on certain models.

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Cargo haulage rates have been climbing on most of trunk routes over the last three months.

The current Rs 63,000 shipment charge between Delhi and Mumbai is a 13 per cent increase on the average monthly rate of Rs 55,700 till December, according to the Indian Foundation of Transport Research and Training.

“Despite remaining high, discounts (on truck sales) have started to moderate in the last month. This has been aided d by a reduction in excise rates. There is a general expectation that discounts could ease with a recovery in demand,” said a report by Ambit Capital, a financial services firm.

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In 2013-14 sales of commercial vehicles dropped 20 per cent to 632,738 from 793,211 sold a year ago, according to the Society of Indian Automobile Manufacturers.

“However, sales of medium and heavy commercial vehicles  would actually be lower than what they were in 2004-05. (The segment) is expected to start showing recovery from the second half of 2014-15,” Icra said.

Tata Motors, India’s biggest truck and bus maker, expects truck rents to rise. “We are cautiously optimistic about an upward trend in freight rates. We are ready to cater to any demand that may come in for medium and heavy trucks,” a company spokesperson said.

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“The economic slowdown had impacted truck sales but we are certainly seeing a demand uptick. With the reopening of new mines and with improving infrastructure we are witnessing a rise in demand for our trucks and buses,” said Anders Grundstromer, managing director for India of Scania, a Volkswagen-owned Swedish truck and bus maker.

Demand Picks Up Speed

• 35,000 bookings for Maruti Celerio in two months
• 24,000 units of Honda City sold in three months
• 15,000 units of Nissan Terrano sold since launch in October
• 8,000 units of by Hyundai Xcent expected to be sold by the end of this month