The Hindu Business Line : Auto sales skid further in December

Barring passenger cars, other automobile segments recorded a sharper fall in December 2008, both on a year-on-year basis and over the previous month’s figures.

Car sales fell by 7 per cent to 82,105 units in December on a year-on-year amid tight financing conditions and growing job insecurity. Yet, bolstered by excise duty cut and heavy discounts from auto makers to push their stocks, sales fell at a relatively lower rate during the month compared to November, according to the data released by the Society of Indian Automobile Manufacturers. Car sales had declined by 19 per cent in November.

Maruti sales decreased by 7 per cent at 46,262 units and Tata Motors fell by 22 per cent at 8,422 units in December last year.

The Maruti Suzuki Managing Director, Mr Shinzo Nakanishi, had recently said, “I can appreciate the measures taken by the Government regarding fuel price and excise duty cuts. But we are hoping that demand picks up from January.”

Last month, discounts were at their peak and combined with the excise duty cut, it had made the concessions all the more lucrative for buyers. Yet, customers deferred their decision waiting to buy the current year’s model and also in the hope of new models such as i-20 and Xylo.

The decline in industrial production and reduced freight reflected in the waning demand for commercial vehicles. Sales of medium and heavy commercial vehicles plunged by 71 per cent to 6,914 units. Light commercial vehicles, which are used mainly for intra city transport, witnessed a 42 per cent decrease in demand at 11,006 units.

Two-wheelers

High interest rates on two-wheeler finance and stringent lending norms by banks and financial institutions pulled down the demand for motorcycles during the month. Bike sales in December stood at 3.35 lakh units, 23 per cent lower compared to the same month in 2007.

The only segment that seems insulated from the current macro economic conditions is scooters. Being less dependent on finance, scooters sales rose to 90,247 units, up 16.45 per cent compared to the same month, the previous year.