Passenger cars competition on the rise - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Passenger cars competition on the rise

Aug 29, 2000

Passenger car sales for the month of July have reported a decline of 10% YoY. In the small car segment the worst hit has been Maruti Udyog which has reported a decline of 26% YoY. However others like Hyundai Motors and Daewoo Motors have reported buoyant growth rates on a year on year basis. Telco's Indica too did not fare well as its volumes declined by 14% YoY from 4,189 cars in July-99 to 3,583 cars in July 2000. This is not very good news for the company as it delays the break even on its car project. The company was earlier expecting to break even on the Indica car project in the current year, however as it is unlikely to reach the target level of 90,000 vehicles per annum this will happen hopefully now in the next year.

Car sales for July decline
Companies Jul-99 Jul-00 % change
Maruti Udyog Ltd 37,404 27,665 -26.0%
Hyundai Motors 4,949 7,265 46.8%
Daewoo Motors 2,801 4,110 46.7%
Ford India 302 1,502 397.4%
General Motors 220 648 194.5%
Tata Engineering 4,189 3,583 -14.5%
Honda Siel 850 606 -28.7%
Mercedes 88 55 -37.5%
Hindustan Motors 2,038 1,941 -4.8%
Total car sales 52,841 47,375 -10.3%

In the mid sized segment, the Ford Ikon has done very well. In the month of July 2000 Ford India sold 1,502 cars, a growth of 397% YoY. General Motors too has reported a robust growth of 195% YoY.

While some players have done well, others have not. This can be attributed to not only a slowdown in the overall automobile segment but due to higher competition in the passenger car segment. With companies coming out with new models, adding features and price wars, competition is on the rise.

In the longer term as it will not be viable for all players to survive, consolidation in the Indian car market is bound to happen like it is happening globally currently.

The reasons for the slowdown in the passenger car market as is in other segments of the automobile industry in the current year, is imposition of uniform sales tax. However the future looks bright for the passenger car segment with lower interest rates, availability of attractive car finance schemes, improvement in the economy and pick up in the second hand car market. Price increases have been minimal in the small car segment as competition is intense, this should continue to spur the volume growth in this segment.

Equitymaster requests your view! Post a comment on "Passenger cars competition on the rise". Click here!


More Views on News

Tata Motors' Stock in Focus as Company Meets Global Investors (Views On News)

Jun 8, 2021

Tata Motors' meeting with marquee investors comes on the back of poor earnings.

Tata Motors Shares Plunge After Reporting Surprise Loss in March Quarter (Views On News)

May 19, 2021

The company wrote off US$ 2bn due to its shakeup of Jaguar Land Rover and warned over the global chip shortage.

What's Behind Tata Motors' Hike in Car and UV Prices? (Views On News)

May 10, 2021

Tata Motors' plan to tackle rise in its raw material prices.

Mahindra & Mahindra Shares Surge on Bagging Contract for Defense Equipment (Views On News)

Jun 4, 2021

Mahindra & Mahindra has signed a contract with the Ministry of Defence.

Auto Sales Dampened in the Month of May. Will it Bounce Back? (Views On News)

Jun 2, 2021

Auto Industry's recovery slows in May due to the second covid wave.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Jun 17, 2021 (Close)


  • Track your investment in TATA MOTORS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks