December car sales (domestic) would be interesting to watch for three reasons: the increasing spotlight on diesel cars on account of pollution concerns, impact of price rise and Chennai floods.
Last month, all the three factors were not there, enabling the segment to post 10.39% growth in sales at 1,73,111 units, up from 1,56,811 in November 2014, according to industry body Siam. It was the 13th straight month of growth for the segment.
December car sales (domestic) were 1.53 lakh units last year, up 15.3% compared to 1.33 lakh units in December 2013.
On 16 December, 2015, the Supreme Court banned registration of diesel cars over 2,000 cc till 31 March, 2016 in Delhi, in response to a plea on growing pollution in the city.
Chief Justice of India, T S Thakur, who headed the SC bench that heard the case, said, "People's life is at stake and you are interested in selling cars."
Mahindra and Mahindra (M&M), which predominantly sells diesel cars in that category, responded by saying that the company will take a hit of 2% on monthly car sales because of the SC order, besides the issue of dealing with inventory of about Rs 100 crore with its car dealers in Delhi.
This December, car makers are not benefiting from the excise duty sop that was available last December for them, to boost sales.
The Chennai floods that disrupted operations at Hyundai Motor India (HMIL), Ford India, Renault India and Nissan, besides affecting sales during the first week of this month in the fourth largest city of India, are bound to reflect on the domestic sales numbers for this month.
Hyundai Creta, which was voted as the Indian Car of the Year 2016 recently, and other models including Eon i10, Grand i10, Elite i20, Xcent, Verna, Elantra are all manufactured at the company's sole plant near Chennai. The company also exports cars made at the facility.
The impact of Renault Nissan is expected to be similar, since the venture also has its sole manufacturing facility near Chennai.
Hyundai Creta and Renault Kwid are highly-in-demand cars, with bookings in excess of 75,000 for Creta in India and 15,000 abroad; Kwid has over 70,000 bookings for India.
Companies such as Ford India, Maruti Suzuki, Mahindra, Tata Motors and Honda Cars (HCIL) that are better spread geographically from a manufacturing point of view would be less impacted.
The top selling cars in India include the Alto, Swift, Swift Dzire, Renault Kwid, WagonR, Hyundai Creta, Grand i10 and Honda City.
In November 2015, six out of the top 10 selling cars were from Maruti Suzuki. Alto was the top selling model at 21,995 units, followed by Dzire and WagonR.
Hyundai's Grandi10 was ranked fourth at 12,899 units.
