The Hindu Business Line : Car sales remain dull on high rates, tight finance

New Delhi, Oct. 1 Auto sales during September remained drab with most customers refraining from purchases due to the Shradh period as well as high interest rates and tight finance.

Maruti Suzuki, which controls over 55 per cent of the market, saw a marginal increase in domestic sales during last month as compared to the declining and stagnant sales that it registered in the previous months.

Many other companies like Honda, General Motors and Tata Motors too witnessed a fall in their sales.

The 10-day spell of Shardh is considered to be an inauspicious period according to the Hindu calendar year -- keeping customers away from making any purchases during the period.

Maruti Suzuki saw a marginal increase of 2.5 per cent in the domestic market. Despite the company having increased discounts on its models like Zen and Wagon-R by Rs 10,000 and Alto by Rs 3000, sales in the segment declined by 1.3 per cent. This was mainly due to high interest rates and the credit squeeze resulting from several rounds of rate hike by the RBI in the past one year.

“Interest rate is not so much an issue. But availability of retail finance is tight,” said Mr Mayank Pareek, Executive Officer, Sales and Marketing, Maruti Suzuki last week.

Overall, Maruti sales increased 5.3 per cent, bolstered by 44.8 per cent growth in exports at 6,318 units.

Hyundai Motors India reported 23 per cent domestic sales with its premium hatchback i-10. The country’s second largest car maker saw the highest ever jump in exports at 23,911 units, reporting an increase of over 100 per cent.

However, Tata Motors sales of passenger vehicles at 16,586 units declined by 2.5 per cent over the same period last year. Honda sales also slumped as the company decreased the production of its City to adjust supplies for the upgraded version of the model.

Two-wheelers

In case of two wheelers, anticipation of an overwhelming response during the festive season led to dealers building up their stocks to meet the demand. This was the main reason for many of the two-wheeler companies registering growth.

Hero Honda motorcycle sales grew by 22 per cent at 3,85,262 units. Bajaj, the second largest bike maker, reported a 6 per cent growth in motorcycle sales including exports at 2,17,365 units.

Honda Motorcycles and Scooters India reported a growth of 38 per cent for motorcycles and in case of scooters, sales grew 8 per cent at 59, 777 units.

“In October, there are four festivals -- Id, Navratri, Diwali and Dushera. We expect lot of cash purchases during this season. So we are building stocks to meet the demand for the peak season,” said Mr Prem Bagga, President, Federation of Indian Automobile Dealers.

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