The rise in inflation is finally taking its toll on the automobile industry. From a healthy double-digit growth of 17.15% in April at 98,740 units vis-?-vis 84,283 units during the same period in 2007 — the growth rate has come down to a mere 6.10% in June at 99,738 units as compared to 94,002 units during the corresponding period last year, according to statistics released by the Society of Indian Automobile Manufacturers (Siam).
Not surprisingly, compact cars have been affected the worst, with segment growth plummeting from 23.29% in April at 73,487 units, as compared to 59,604 units in April last year, to a low of 3.69% in June at 68,068 units vis-?-vis 65,663 units during the same period last year.
Even in terms of absolute numbers, compact car-sales have come down from 79,983 units in May to 68,068 units in June, a dip of 14.87%. While sales of compact-car market leader Maruti Suzuki India Ltd (which includes models like Alto, Wagon R, Swift and Zen) declined by 15.2% from 44,539 units in May to 37,767 units in June, India’s second largest passenger car manufacturer Hyundai Motor India Ltd (HMIL), which is present in the segment with Santro, Getz and the recently launched i10, also registered a dip of 14.7% at 18,114 units in June as compared to 21,242 units in May.
Tata Motors, which has been witnessing a decline in demand for Indica for several months, also posted an 11.63%-dip in sales at 8,560 units in June as against 9,686 units in May. Sales of General Motors’ compact cars (which include the Spark and the U-VA) also came down from 3,086 units in May, to 2,218 units in June, posting a dip of 28.13%.
According to a Mumbai-based analyst, double-digit inflation has forced the middle-income segment, the largest buyers of compact cars, to postpone purchases plans and this has badly impacted the sales of small cars.
According to Siam, the total two-wheeler sales grew by 6.4% in June to 6,01,941 units from 5,65,433 units in the same month last year. This was mainly due to the increase in sales of motorcycles, led by the country’s biggest manufacturer, Hero Honda. Scooters, however, registered a dip of 2.1% at 89,809 units, compared to 91,759 units in June 2007.
In the motorcycle-segment, Hero Honda reported a jump of 16.56% in sales at 2,77,654 units as against 2,38,195 units last year. However, rival Bajaj Auto reported a decline of 2.5% to 1,20,143 units in June as against 1,23,273 units in the same month last year. Even Chennai-based TVS Motor reported a decline of 7.7% at 37,236 units as compared to 40,379 units in the corresponding month last year. In June, sales of commercial vehicle went up by 13.5% to 40,324 units, from 35,518 units during the year-ago period. While sales of light commercial vehicles grew by 20% to 18,569 units as against 15,463 units in June last year, sales of medium and heavy commercial vehicles posted a growth of 8.4% at 21,755 units as against 20,055 units in the same month last year.