Automobiles, especially car sales, fell for a record seventh month in a row in May recording a steeper than expected decline of 12.26 percent, prompting the industry body Siam to warm that the prolonged slump in the market may lead to retrenchments in the industry. According to the monthly data released by the Society of Indian Automobile Manufacturers (Siam), domestic passenger car sales in May stood at 1,43,216 units as against 1,63,222 units a year ago.
"This is the longest stretch of consecutive decline in car sales we have seen. Even in the 2008-09 slowdown there was no such prolonged period of fall. These are worrying times for the automobile industry," Siam director-general Vishnu Mathur said in the Capital on Monday.
Overall economic slowdown, high inflation and interest rates, low consumer sentiment and insecurity over jobs are affecting demand for cars, he added. On the possibility of this leading to job losses, Mathur replied in the affirmative, saying "so far we have not received any specific information of people being laid off but the situation is such that it may have started or will start soon." The first to be affected will be the contract and temporary workers, mostly at the component suppliers levels. Even the original equipment manufacturers may follow suit if the demand for cars continued to be low, he added.
The previous record for the longest consecutive decline in car sales since Siam started collating data in 1997-98 was in April this year when sales fell 10.43 percent to 1,50,789 units. During May, market leader Maruti Suzuki saw its domestic sales falling 8.25 percent to 66,342 units, while the immediate rival Hyundai posted a marginal 0.35 percent rise in volume at 32,052 units, but Tata Motors saw its sales plunge 48.60 percent to 8,927 units.
Surprisingly, Honda Cars posted a healthy 9.31 percent sales jump at 11,274 units in the month, helped by newly-launched compact sedan Amaze. What is worrying Siam is that except for the utility vehicles and scooters, all the segments have posted decline in sales. "For the overall passenger vehicles segment, it was the sixth consecutive month of decline in sales, while for total heavy commercial vehicles it was the 15th month of dip on a stretch," Mathur said, adding it is also the fourth consecutive month of decline in bikes sales, recording a marginal
0.72 percent dip to 8,81,288 units.
Hero MotoCorp saw its sales contract 2.11 percent to 4,92,044 units, against a 2.6 percent spike in sales for Bajaj at 2,12,129 units, while Honda Motorcycle too reported a minor 2.79 percent decline in sales to to 85,866 units during the month. Scooter sales were, however, in the positive territory, growing a good 13.06 percent at 2,65,892 units as against 2,35,185 units in the same month last year, Siam said.
Honda saw its scooter sales grow by 8.56 percent at 1,34,750 during the month, while Hero posted 52.97 percent jump in scooter sales at 55,549 units. TVS Motor too saw its sales dip 6.11 percent at 32,801 units during the month. According to Siam, total two-wheeler sales in the month was almost flat with a tepid 1.13 percent uptick to 12,06,173 units from 11,92,700 units a year ago. During the month, three-wheeler sales declined 3.46 per cent to 35,841 units. Total sale of commercial vehicles declined 10.6 percent to 55,458 units from 62,032 units in the year-ago period.Total sale of vehicles across categories registered a decline of 0.93 percent to 14,98,909 units in May as against 15,12,986 units a year ago.
