The Hindu Business Line : Political turmoil, stock markets may dent May auto sales

EARLY reports from car and two-wheeler manufacturers and some dealers indicate that political uncertainty and stock market crash may have caused a dent to car and two-wheeler sales during May.

According to reports from the industry, political turmoil in the country and the subsequent stock market crash kept most of the prospective customers away with enquiries for cars and two-wheelers at showrooms slowing down, compared with the previous months. ``We expect drop in sales for our vehicles by around 15 per cent in May compared to our target. But it will definitely be better than the same month last year,'' the Bajaj Auto Vice-President for Sales and Marketing, Mr R.L. Ravichandran, said. He said reports from dealers across the country state that political uncertainty and the crash in the market had slowed down the sales.

``After May 13, car sales took a dip with decline in bookings,'' the Federation of Automobile Dealers Association (FADA), Mr Deshnidhi Kasliwal, told Business Line. He said small investors who form a large part of the investor community, took a major hit because of the stock market crash and most of these investors had put off their decision to book cars. ``The bookings itself dropped substantially,'' Mr Kasliwal said. Another Bangalore-based dealer said some of the mid-sized cars which used to sell at least eight to 10 a day had its sales drop to two a day. But Mr Kasliwal said the drop in sales may not long last.

However, Skoda's General Manager for Sales and Marketing Mr Bipin Datar said sales of Octavia had in fact gone up during May. ``The first two weeks of May saw good sales,'' Mr Datar said. Sources in Maruti said traditionally passenger car sales peak in March and slow down in April and May.

In May 2003, car sales jumped 41 per cent with major auto manufacturers recording strong growth. Total passenger car sales rose to 55,166 units from 39,150 units in May 2002, according to the Society of Indian Automobile Manufacturers (SIAM).

In April 2004, a total 56,272 units were sold compared with 42,499 units in the same month last year, SIAM said.

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