Automobile sales during the month of July saw high growth as the top seven auto companies who declared their sales numbers saw a combined growth of 17.2%. The reason for the good sales growth is the better than expected monsoon, reduction in fuel prices and the number of new launches during the month. This is a healthy double-digit growth in sales of automobile manufacturers in comparison to a decline in sales just a month earlier. Car sales in India grew the slowest in five months in June at 1.53 per cent according to the Society of Indian Automobile Manufacturers (SIAM).
Maruti Suzuki, Hyundai Motors and Honda Cars India posted strong double-digit growth during the month of July. Maruti Suzuki domestic sales grew by 22.5% to sell 1,10,405 units in July as against 90,093 units in July 2014. The sales were driven by high growth in mini cars such as Alto and WagonR which grew by 31.3% to 37,752 units. The demand of other cars such as Swift, Ritz, Celerio and DZire grew by 13.9 per cent to 48,381 units.
Hyundai too saw a high double-digit growth of 24.7 per cent as its sales volumes rose to 36,500 units this July as compared to 29,275 units in the corresponding month last year. The growth was driven specifically by new launches such as new premium hatchback Elite i20, i20 Active and new SUV Creta.
Honda Cars saw its sales rise by 18.44 per cent as it managed to sell 18,606 units in July 2015 compared to 15,709 units last July. This large rise in sales was chiefly driven by the newly launched Jazz as it contributed as much as 36 per cent of the sales with 6,676 units sold during the first month of the launch.
Volkswagen too saw a double digit increase in sales as it clocked in an 18.2 per cent growth to 4,029 units in July this year. This growth was on the back of the newly launched Vento.
Tata Motors saw a high double digit growth of 27.1 per cent of passenger cars (excluding utility vehicles) in July as it sold 8,520 units as against 6,703 units in July 2014. This growth too was driven by their new launches of Zest, Bolt and the new GenX Nano.
Toyota Kirloskar Motor (TKM) on the other hand saw a 1.2 per cent growth as it managed to sell 12,070 units in July 2015 in comparison with 11,921 units in July last year.
Mahindra & Mahindra was the only major four wheeler auto manufacturer to see a drop in the total domestic sales with fell by 6% in July 2015. The car major managed to see 31,087 units in July 2015 as against 33,047 units in July 2014.
The growth in the sales of auto companies comes as good news as the sector is an integral pillar to the economy. It is also vital for the media and advertising sector as a large portion of ad spends come from automobile manufacturers. Better than expected monsoon season and reduced fuel prices helped in increasing sales signals that not only rural buying will see an uptick but reduced fuel prices help push sales for those who were had earlier kept their buys on hold. The high growth in July was driven chiefly by new launches. This is encouraging as car manufacturers will not only keep promoting these models but also introduce newer models soon. Auto companies tend to put more in terms of ad spends on new launches. We saw that in July with numerous launches like the new Honda Jazz, Hyundai Creta, Chevrolet Trailblazer, Nissan Micra X-Shift, etc.
New launches expected in August
Maruti Suzuki just launched the S-Cross on August 5. The car which is at a starting price of Rs.8.34 lakh is in the premium category. It can be expected to call for a good amount of marketing spends on the new product.
Another launch is the Fiat Abarth 595 Competizione for which the launch date was August 12 and is expected to be in the price range of Rs.20-25 lakh. Fiat has finally gone ahead with the launch as the car was expected to be launched a while back but was delayed.
Ford Figo Aspire is expected to be launched by mid-August and the much anticipated sub-compact sedan will make its way into the Indian market. The car is expected to be in the range of Rs.5.30 – 9.50 lakh.
The Mercedes-Benz S63 AMG Sedan will also be launching in India on August 11. The car will have limited sales in India.
Renault too is expected to launch the Renault KWID in August 2015.
Our typical marketing budget is usually 10 per cent of the topline spend