Celerio a Bright Spot for Maruti Amid Weak April Sales

Maruti Suzuki on Thursday posed a sharp 11.4 per cent year-on-year drop in car sales in April 2014 in an indication that the worst might not be over for the Indian car industry. India's biggest car maker sold a total of 86,196 units in April 2014 as compared to 97,302 units in the corresponding month last year.

April's sales were 24 per cent lower than previous month's (March 2014) total sales of 1,13,350 units.

Maruti's high margin Dzire sales dropped 17.7 per cent y-o-y to 16,008 units in April, indicating the onslaught from Honda's Amaze and Hyundai Xcent might have impacted sales. This is the second straight month when Dzire sales have dropped on an annual basis.

Maruti sold 25 per cent fewer cars in the mini segment that comprises Alto, A-Star and Wagon R. Sales of Maruti utility vehicles (Ertiga) and vans fell nearly 6 per cent and 4 per cent respectively.

The only silver lining was the compact segment, comprising the Swift, Estilo, Ritz and Celerio models, where sales grew by nearly 10 per cent. The compact segment might have done well on the back of newly launched Celerio, which is among the handful of models with a waiting period. (Read: Why Celerio is a gamechanger)

Analysts expect car sales to register a positive growth in the current fiscal after two disappointing years. Passenger car sales in India fell nearly 5 per cent in the year ended March 2014 and almost 7 per cent a year prior after more than a decade of increase, as buyers were put off by high inflation and interest rates and slow growth.

The government cut excise duty in February, but the measure has failed to bring buyers to showrooms, analysts say.

Last week, Maruti said it would continue to offer discounts on most of the models to boost sales. The company offered an average discount of Rs 17,500 across models in the fourth quarter ended March, 2014. (Read the full story here)