The Hindu Business Line : Passenger car sales skid in Aug, two-wheelers race ahead

New Delhi, Sept. 11 The domestic passenger car market shifted gears to a declining sales route in August from the sluggish growth path in the previous months. Car sales recorded a 4 per cent dip for first time in the current fiscal. Apart from Hyundai Motors India, the second largest player, most companies such as Maruti Suzuki, Tata Motors and Honda posted lower sales numbers during the month.

Several interest rate hikes in the last one year and a record high inflation are forcing customers to postpone their purchases in anticipation that rates may come down in a few months’ time. Maruti’s sales plunged by 10 per cent to 46,811 units. Tata Motors was also down by 10 per cent to 12,216 units, while Honda Siel Cars sold 3,816 units, a decline of 14 per cent as compared with the corresponding period in the previous year. Sales remained sluggish for various car makers despite a combination of factors including new model launches, attractive discounts and financing options that lowered interest rates by about 2 per cent.

“Consumer sentiments are very negative. It takes almost six months for customers to adjust to interest rate hikes. So, with interest rates going up and inflation remaining high, there has been a cut in consumer spending,” said an auto analyst with B&K Securities India.

In addition, market watchers say that last year the interest rates were relatively lower and the base was high, which makes last month’s sales figures appear to be lower.

Truck and smaller cargo vehicles also witnessed a dip due to lower demand from the manufacturing sector with the economy slowing down. Commercial vehicles sales in August slipped 6 per cent and three-wheelers sales declined by 3.19 per cent.

With lower base of last year, motorcycle sales grew 15 per cent. Hero Honda grew at almost double the industry rate by selling 2,84,752 units, an increase of 28.83 per cent. In contrast, Bajaj’s sales in the domestic market stood 3 per cent lower at 1,16, 887 units and TVS volumes during the month remained almost flat at 36,092 units. Honda Motorcycles, a nascent player in the motorcycle segment, showed the highest increase of 34 per cent at 27,820 units.

The scooter and scooterettees segment, being less dependent on finance, grew marginally by 5 per cent at 96,461 units.

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