The once vrooming car market has come to a standstill, nope reverse gear, recording the eighth month fall in sales in row in June with a 9 percent plunge, as consumer sentiment remained weak, prompting industry body Siam to seek stimulus package for the sector.
With actual sales in the first quarter of this fiscal turning out to be wide off the mark from what it had forecast in April, the Society of Indian Automobile Manufacturers (Siam) stayed away from revising sales projections it had made and stated that even those targets are unlikely to be met, except by the two-wheeler segment.
According to the latest figures, car sales stood at 1,39,632 units in June as against 1,53,450 units a year ago. "The slow economic growth, high interest rates and fuel prices, high inflation are all affecting consumer sentiments. The government needs to have a re-look and bring a stimulus package for the auto industry which will help in achieving higher growth," Siam president S Sandilya told reporters here.
The industry lobby is looking at the a stimulus package similar to the one given during the 2008-09 downturn, in which excise duty on two-wheelers, small cars and commercial vehicles were reduced to 8 per cent, Siam director general Vishnu Mathur said. He, however, said the industry body has not yet approached the government for the same.
In June, market leader Maruti Suzuki posted 8.17 per cent decline in domestic sales at 65,172 units as against 70,977 units in the corresponding month last year. Hyundai posted a marginal increase in sales to 30,577 units from 30,363 units, while Tata Motors had a decline of 29.17 per cent to 9,628 units from 13,595 units.
Homegrown major Mahindra & Mahindra posted 17.17 per cent decline in its utility vehicle sales at 15,916 units from 19,348 units in June last year. "Utility vehicle sales have been affected by hike in excise duty to 30 per cent from 27 per cent announced in this year's budget," Mathur said, adding that high cost of ownership has also deterred buyers of entry level segment cars.
On the forecast, Sandilya said in the April- June period this fiscal, domestic car sales declined by 10.41 per cent as against 3-5 per cent increase forecast in April. Similarly, two-wheeler sales also dipped by 0.82 per cent against a forecast of 6-8 per cent, commercial vehicles were down by 8.12 percent against a projected growth of 7-9 percent. "In such a volatile scenario, we thought it doesn't make a sense to give a revised forecast now," he said, adding it is unlikely that the growth projection made in April would be met in almost all the segments this fiscal, except two-wheelers.
According to the Siam data, motorcycle sales declined by 9.16 per cent to 7,99,139 units from 8,79,721 units a year ago. Market leader Hero MotoCorp registered 10.14 per cent decline at 4,39,845 units, while rival Bajaj Auto saw its sales dip by 24.5 per cent to 1,59,688 units in June. However, Honda Motorcycles saw its bike sales grow by 19.28 per cent to 1,13,700 units in June this year. Siam said scooter sales in June grew by 15.16 per cent to 2,58,224 units as against 2,24,224 units in the year-ago month. Honda registered 5.17 per cent increase in its scooter sales go 1,27,154 units, while Hero MotoCorp had 61.93 per cent increase in scooter sales to 52,312 units in June this year.
Chennai-based TVS Motor Co posted 1.92 per cent decline in scooter sales to 36,969 units during the same month. Total two-wheeler sales in June 2013 declined by 4.56 per cent to 11,16,424 units from 11,69,741 units in the same period of previous year, SIAM said. "With 50 per cent of the two-wheeler sales coming from rural areas, we hope that the monsoon, which is average or above average so far, will have a positive impact on sales," Mathur said.
Three-wheeler sales in June this year declined by 8.71 per cent to 38,414 units as against 42,081 units in the same month last year. Total sales of commercial vehicles declined by 13.45 percent to 56,197 units from 64,928 units in the year-ago period, Siam said. "The commercial vehicles segment is the most depressing scenario. This is the 15th successive month of decline in the segment as there is overall slowdown in economy and freight movement has been affected," Mathur said. Total sales of vehicles across categories registered a decline of 5.10 per cent to 14,07,767 units in June as against 14,83,443 units in the same month of 2012, it added
