Car sales skid on interest rates, petrol cost

Written by fe Bureau | New Delhi | Updated: Jun 2 2012, 07:52am hrs
Absence of diesel variants in mini-car segment costs Maruti dear even as Hyundai reports modest growth

High interest rates and hike in petrol prices dampened the sales of passenger vehicles of auto majors, such as Maruti, General Motors and Ford, in May, further tempering down the growth of the auto sector for the second month in a row. The car sales had registered a spurt of 20% in March.

Absence of any diesel variants in its bread-and-butter segment of mini cars cost the country's largest car-maker Maruti Suzuki India (MSIL) a 4.32% decline in its overall domestic sales, which stood at 89,478 units, compared to 93,519 units a year ago. Ford and General Motors also posted a 14% and 27 % dip in sales at 6,036 units and 6,079 units, respectively, over the same period last year.

For Maruti, even a 14.66% rise to 24,290 units (from 21,185 units) in its compact segment, comprising the Estilo, Swift and Ritz models, wasn't sufficient to reverse the fall caused by decline in sales across all other segments, including export. Sales in Maruti's mini car segment, which includes Alto, A-Star, Wagon R and Maruti 800, tumbled 29.03% to 29,895 units from 42,125 units in May last year.

Even the Korean car-maker Hyundai Motors India saw sluggish growth as it posted a modest growth of 2.8% in May. Hyundai sold 32,010 units in the month against 31,123 units in May last year. Commenting on the sales Arvind Saxena, director, marketing and sales, said: The recent hike in petrol prices has depressed market sentiment, with the macro-economic indicators providing no cause for cheer, the demand outlook doesnt look very bright. The company's exports, however, grew at an impressive 42.2% , recording sales of 23, 660 vehicles compared to 16,639 last year.

Tata Motors, the country's third largest car-maker saw a 6% growth in its sales figures (20,503 units against 19,401 units). Nano sold 8,507 units, a jump of 31%, compared to 6,515 units. But the Indica range of cars sales declined 1% (5,467 units compared to 5,497 units in May 2011).

Riding on the demand wave for diesel vehicles, sports utility major Mahindra & Mahindra witnessed a 24% jump in sales for May (it sold 39,938 units against 32,159 units in May 2011). Toyota Kirloskar also saw sales doubling on the back of strong fleet/taxi sales of the Innova and Etios range.