Passenger vehicle sales remained under pressure in December with high interest rates and increase in insurance costs deterring consumers from buying cars. Carmakers — which were saddled with high inventory following a weak showing this festive season — offered record discounts to liquidate stocks ahead of the new year. Automakers expect new launches will revive market sentiments and help boost volumes in the fourth quarter of the current financial year.

Maruti Suzuki India’s (MSIL), the country’s largest carmaker, wholesale volumes grew by a meagre 1% to 119,804 units in the period under review. While sales of mini cars Alto and WagonR declined 14% to 27,661 units, those of compacts (Swift, Celerio, Baleno, Ignis and DZire) fell 3.8% to 51,334 units. However, sales of midsize sedan Ciaz nearly doubled to 4,734 units in the same period. Sales of utility vehicles too increased 4.9% to 20,225 units.

The company separately sold 1,675 units of small commercial vehicle Super Carry. Exports for the company declined by 36.4% to 6,859 units, dragging overall volumes down by 1.3% to 128,338 units. Carmakers in India report wholesale dispatches made from factories and not actual sales to consumers. Maruti Suzuki, whose volumes have remained largely flat in the past six months, expects demand to improve in the new year. In a recent interaction, MSIL chairman RC Bhargava had said, “We have aggressive retail sales target for December which we expect to achieve. So, inventory at the beginning of January will be at low levels. We will launch a new model next quarter, which will help reverse the trend and push up volumes.” With the new WagonR lined up for launch later this month, Maruti Suzuki expects to capitalise on potential demand and grow wholesale volumes by 5% in the fourth quarter. Overall, the company expects volumes to go up by 8% — as against the initial double-digit growth target it had set for itself — for the entire fiscal year.

Korean rival Hyundai Motor fared better, selling 42,093 vehicles in December on the back of the newly launched Santro, Grand i10, Elite i20, Verna and Creta. The company’s sales rose 4.6% last month over 40,158 units sold in the corresponding period of 2017. Honda Cars India also posted a 4% increase in monthly sales numbers at 13,139 units. Rajesh Goel, senior vice-president and director (sales & marketing), HCIL, said, “The market continued to remain challenging in December. However, with lucrative year-end offers on many of our models and strong performance of new models Amaze and CR-V, HCIL recorded 4% sales growth in December 2018.”

Tata Motors saw wholesale volumes rise by a modest 1% to 14,260 units. Meanwhile, Mahindra & Mahindra (M&M) saw wholesale volumes dip by 3% to 15,091units. “In the domestic market, challenges relating to tight liquidity and low buying sentiment continued in December. We hope to see good performance in Q4, owing to anticipated rural demand because of harvesting season and the launch of our new XUV300 in February 2019,” said Rajan Wadhera, president, automotive sector, M&M. Toyota Kirloskar Motor (TKM) bucked the trend to report 10% increase in wholesale volumes at 11,830 units, driven by demand for the Innova Crysta and the Fortuner. N Raja, deputy managing director, TKM said, “We are happy to close the year end with a series of positive milestones despite the dampening effect on consumer sentiment owing to rise in fuel prices, higher interest rates, increase in insurance premium.” Sales of commercial vehicles, too, were affected last month due to liquidity tightening in the market in the aftermath of the IL&FS crisis. Market leader Tata Motors reported 11% decline in sales of commercial vehicles at 36,180 units.

“In December 2018, consumer sentiments remained slightly subdued as customers were waiting to see a sustained level of improvement in factors such as fuel prices and profitability before deciding further investments in new vehicles”, the company said in a statement. At VE Commercial Vehicles, sales grew by 1% to 5,235 units. In the two-wheeler segment, Royal Enfield saw sales (domestic and exports) drop by 14% to 56,026 units.