Rising interest rates, fuel costs and an uncertain global economic environment saw car sales decline nearly 2% in September to 1.65 lakh units from 1.68 lakh units in the corresponding month last year. The country?s top three car makers ?Maruti Suzuki, Hyundai Motor and Tata Motors ? that account for nearly 60% of the total cars sold in India, reported a 7.4% drop in cumulative sales to 1.23 lakh units as compared with 1.33 lakh in the same month last year. The apex auto body Society of Indian Automobile Manufacturers Association (SIAM) also ruled out any significant turnaround in sales despite the setting in of the festive season.
This has prompted SIAM to lower the growth forecast for passenger car sales in the current fiscal to just 2-4% from 18-20% projected at the start of the year. The last time car sales registered low single digit growth was back in October 2010. ?We have lowered the forecasts because issues of interest rates and fuel costs still remain (for the industry),? president of SIAM S Sandilya said. Among the worst hit during the month was Maruti Suzuki which saw its passenger car sales nosedive nearly 18% to 66,667 units from 81,060 units in the corresponding month last year. This was primarily on account of the labour troubles that have hit the company?s Manesar plant. Hyundai Motor and Tata Motors reported 11% and 2% growth in car sales respectively.
However total two-wheeler and commercial vehicle sales continued to grow robustly. During the month the overall sales for two-wheelers grew 24.2% to 12.33 lakh units from 9.92 lakh units in the corresponding month last year. Similarly commercial vehicle sales stood at 70,634 units as against 59,836 units ? a growth of 18%. ?Both commercial vehicles and two-wheeler sales have grown at a healthy rate. This is mainly on account of rural development (which has pushed up sales),? said Sandilya. He also said above average rainfall and softening in commodity prices could help the industry in the next six months.
Meanwhile despite lower than expected sales India becamse the second fastest groiwng market in the world for passenger vehicles in the January-August period at 9.9% next only to Germany (11%). The US, Brazil and China grew at 9.3%, 7.5% and 6% respectively during the same period.
Etching out the concerns for the industry over the next six months Sandilya said that apart from rising fuel costs and surging interest rates, issues of labour unrest could also put a spoke in the wheels for automobile sales. Though he refrained from specifically commenting on Maruti?s labour strike he however said that since the events at Manesar had taken a violent turn causing serious law and order problems, the Haryana government must intervene to end the dispute amicably. He also said that a part of the reason for lower car sales was on account of the labour troubles at Maruti which has lowered the overall sales for the industry.
However total two-wheeler and commercial vehicle sales continued to grow robustly. During the month the overall sales for the two-wheelers grew 24.2% to 12.33 lakh units from 9.92 lakh units in the corresponding month last year. Similarly commercial vehicle sales stood at 70,634 units as against 59,836 units ? a growth of 18%. “Both commercial vehicles and two-wheeler sales have grown at a healthy rate. This mainly on account of rural development (which has pushed up sales),” said Sandilya. According to him above average rainfall and softening in commodity prices could help the industry in the next six months.
Meanwhile despite lower than expected sales India becamse the second fastest groiwng market in the world for passenger vehicles in the January-August period at 9.9% next only to Germany (11%). The US, Brazil and China grew at 9.3%, 7.5% and 6% respectively during the same period.