The Hindu Business Line : Terror attacks to dent sales, say car makers

Bangalore, Nov. 29 A sharper fall of sales because of the terrorist attack in the second biggest market for passenger cars in India is expected to further pull down the auto industry’s growth this fiscal.

Car makers claim that Mumbai, being the second largest market for passenger cars, will see sales dip substantially because of the terrorist attacks.

“Our sales will get impacted and deliveries too will be delayed,” a Honda spokesperson told Business Line.

The spokesperson said that bookings for the new Honda City, which was launched recently, might see a fall and even the deliveries of the car would be put off.

Mumbai accounts for about 17 per cent of Honda Siel’s total sales.

A Federation of Auto Dealers Association (FADA) member said car makers expect better sales in November because sales in December is the least during the entire year as customers tend to postpone their buys to January.

“With sales in November getting affected, dealers’ problems will be compounded,” he said.

Sources in Maruti Suzuki, whose market share is more than half of the sales of passenger cars in the country, said usually sales tend to happen during the end of each month but this time it will be put off.

Between 7,000 and 8,000 units of passenger cars are sold every month in Mumbai and Maruti Suzuki accounts for about half of them.

The Vice-President of General Motors, Mr P. Balendran, said terrorist attack will affect sales of the car maker.

“Most of our dealers are based in the south of Mumbai, which is also the most affected by the terrorist attack. We will see fall in sales in the short term at least,” Mr Balendran said.

Angel Broking analyst for the auto sector, Ms Vaishali Jajoo, however, felt that terrorist attacks may not affect the auto industry.

“The terrorist attacks are happening in just one part of the country,” she said.

Ms Jajoo, however, said that passenger vehicle sales during the current fiscal will come down by about 4-8 per cent because of high interest rates and the country’s poor economic climate .

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