Car sales in India fall in Jan, no respite seen: SIAM

Written by Reuters | Greater Noida | Updated: Feb 11 2014, 20:18pm hrs
Domestic salesDomestic passenger car sales declined 7.59 per cent to 1,60,289 units in January compared with 1,73,449 units in the same month of 2013. (AP)
Car sales in India fell 7.6 percent in January, the fourth straight month of decline, according to figures released by the Society of Indian Automobile Manufacturers (SIAM), in a market set to fall for the second straight year.

Car sales fell to 160,289 vehicles last month, the industry body said, as consumers kept a tight lid on spending, hurt by high interest rates and fuel costs in a slowing economy.

Car sales have fallen 5.2 percent so far this fiscal year that ends in March.

"There is no respite," said Sugato Sen, SIAM's deputy director general.

Sales of passenger vehicles, which include cars and utility vehicles, fell 9.3 percent in January.

Utility vehicles were a bright spot in the auto market a year ago, but an increase in factory gate duties and rising prices of diesel, which is commonly used to power such vehicles, has hit their sales as well.

Sales of motorcycles rose 4 percent last month to 922,323, while commercial vehicle sales were down 20.9 percent at 49,987, SIAM said. Demand for trucks and buses has been hit hard as industrial production and economic activity slows.

The volume decline in passenger and commercial vehicles, which started in the second quarter of fiscal 2012, may continue in the fiscal year that starts in April, India Ratings & Research, a unit of Fitch Group, said in a recent note. However, the volume growth rate may turn positive after September, it said.

Demand for cars has fallen, particularly in urban areas, with the economy growing at its slowest pace in a decade.

Still, consumers in rural areas, where incomes are being partly boosted by strong monsoon rains, are helping some companies such as Maruti Suzuki India, the country's top carmaker, offset the slowing sales.

While there are no signs of an immediate recovery, the auto industry is hoping that the government may cut factory gate duties when it presents the interim budget, Sen said.

Finance Minister P. Chidambaram is widely expected to announce measures, including a cut in factory gate duties on some products, to push up manufacturing output when he presents an interim budget for the coming fiscal year in parliament on Feb. 17.

Automakers are also betting that pent up demand and new vehicle launches, many of which were unveiled at the ongoing auto show in the outskirts of New Delhi, will help boost sales, especially after a general election due by May.

Domestic car sales down 7.59 pct in January, bikes up 4 pct

(PTI) Car sales in India fell for the fourth straight month in January this year with a decline of 7.59 per cent, prompting industry body SIAM to seek government support in the upcoming interim Budget.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic car sales stood at 1,60,289 units in January this year compared to 1,73,449 vehicles in the same month of 2013.

Compounding the problem for the auto industry was the prolonged slump in the commercial vehicles (CV) segment, under which heavy and medium CVs saw 23rd month of consecutive drop in sales.

"The downward trend continues. There is no respite for the auto industry. We are having a huge hope from the government that in the vote-on-account Budget, there will be some support for the auto industry," SIAM Deputy Director General Sugato Sen told reporters on the sidelines of Auto Expo here.

He said the situation now is worse than that in 2008-09, when the government had provided relief to the industry with policy support.

"We are hoping that there will be reduction in excise duty. For the CV segment, we have been asking for a fleet modernisation scheme and also implementation of load management," Sen said but did not specify the exact amount of excise duty cut the industry body was expecting.

Heavy Industries Minister Praful Patel has already written to the Finance Ministry seeking reduction in excise duty on CVs to 8 per cent from 12 per cent.

At present, automobiles attract excise duty ranging from 12-30 per cent, Sen said.

Reflecting the sluggish market, car market leader Maruti Suzuki India in January posted 6.88 per cent decline in its domestic sales at 82,461 units as against 88,557 in the same month last year.

Hyundai Motor India Ltd also posted 2.61 per cent dip in sales during the month at 33,351 units as compared to 34,247 vehicles in January last year. Homegrown Tata Motors saw its sales decline by 24.38 per cent to 8,463 units in January from 11,192 in the same month last year.

Honda Cars India, however, saw its sales increase nearly three-fold to 15,597 units in the month from 5,421 in January 2013.

Sen said the industry is hoping that "the positivity created by the Auto Expo with the 70 new unveilings and launches will at least help in exciting the market".

According to SIAM data, total commercial vehicle sales were down by 20.93 per cent to 49,987 units from 63,218 units, while that of M&HCV were also down by 17.42 per cent at 15,769 units as against 19,095 units in the same month last year.

"For the total CV segment, this is the ninth month of decline, while for M&HCV it is the 23rd month of consecutive decline," Sen said.

Motorcycle sales in January grew by 4.04 per cent to 9,22,323 units from 8,86,521 in the same month last year.

Market leader Hero MotoCorp saw its domestic bike sales decline marginally to 4,89,322 units in January from 4,94,109 in the year-ago month. Rival Bajaj Auto's sales declined by 14.36 per cent to 1,67,869 units from 1,96,023 in the same month last year.

Honda Motorcycle and Scooter India (HMSI), however, bucked the trend posting a growth of 45.26 per cent at 1,53,930 units as compared to 1,05,968 in January last year.

Total two-wheeler sales in January 2014 grew by 8.85 per cent to 13,13,796 units from 12,06,931 in the same period of previous year, SIAM said.

Scooter sales during the month grew by 28.19 per cent to 3,23,162 units as against 2,52,094 in january last year.

HMSI led the growth with 59.65 per cent jump at 1,76,831 units as compared to 1,10,757 units in January last year. Hero MotoCorp also posted a growth of at 20.48 per at 64,737 units as against 53,732 in the year-ago month.

Chennai-based saw its scooter sales grow by 19.72 per cent to 43,502 units from 36,335 in January 2013.

Total sale of vehicles across categories registered a growth of 3.75 per cent to 16,19,689 units in January 2014 as against 15,61,130 in the year-ago period, SIAM said.