Strike hits Maruti sales hard, floods wash out Honda festivities in October 2011
Posted on November 4, 2011 by CarToq Editor
While most carmakers celebrated the festive season with some decent sales numbers in trying times, two carmakers couldn't really join the celebrations – Honda and Maruti. In fact, things were so bad at Maruti that overall sales of the auto industry have declined 55% in October, which is usually one of the best months. That's because Maruti is still the majority volume player in the auto market in India.
Huge setback for Maruti due to strike
Maruti's sales dropped 54% to just over 25,000 units totally from an average of over 54,000 units a month. All its car models have been hit badly due to the labour strike at its plant in Manesar, forcing it to shut production for a while, losing out on production of over 40,000 vehicles. The labor strike in Maruti extended to its Gurgaon plant as well, also affecting production of vehicle components.
Sales of Maruti's highest-selling model, the Alto, dropped 28% from 21,198 cars in September to just 15,197 cars in October, though it still remains India's largest selling car. But the second largest-selling car in India, the Wagon-R, had to surrender its No.2 spot to the Hyundai i10. The Wagon-R's sales fell 40% to 7,934 cars in October from over 13,300 cars in September. The Hyundai i10 was quick to cash in on the Wagon-R's bad luck in the festive season, with sales jumping 18% to 11,557 cars.
Photo: Maruti could not capitalise on the high demand for the new Swift due to labour troubles
The cars worst affected by the strike at Maruti's plant are the SX4 with sales at just 320 cars, the A-Star with sales falling to 277 cars from 832 the previous month, and Estilo with sales dropping 57% to to 715 cars in October.
The new Maruti Swift, though, managed to still sell about 7,840 cars, thanks to Maruti making arrangements for continuing Swift production in its Gurgaon plant, when Manesar production froze. However, it doesn't appear to have lost out much to rivals, as Ford Figo and Indica and Vista sales combined have remained at about the September levels.
Floods wash out Honda's festivities
Things weren't too good at Honda as well in a month when it should have been celebrating high volumes for the Jazz and Brio. This was the first full month of sales for the Honda Brio, which is the company's volume car, competing with the Chevrolet Beat and Maruti Ritz. The Honda Brio saw sales of 1,220 cars in October, while the Jazz, which saw huge bookings after the new lower priced Jazz was launched, saw sales of just 463 cars.
The main reason for the Honda's poor festive performance was the floods in Thailand, from where Honda sources many components for the Jazz and Brio. The floods in Thailand come at a time when Honda had still not fully recovered from the tsunami in Japan's effect on its production in India. Even though the company has increased its production capacity to 10,000 vehicles, it does not have the kits to make more Jazz or Brio cars. Sales of Honda's City, Civic and Accord have been consistent with previous months.
So while most other carmakers saw their sales spike during the festive season, despite rising interest rates and high fuel costs, Maruti and Honda have not managed good festive sales. Let's hope the new year brings these two carmakers some cheer.
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