The Hindu Business Line : Passenger car sales continue to slide

New Delhi, Feb. 9 Passenger car sales declined for the fourth consecutive month in the current fiscal with January figures reporting a 3 per cent drop in sales compared with the corresponding period the previous year, according to figures released by the Society of Indian Automobile Manufacturers.

Almost 12 out of 16 passenger vehicle producers reported a fall in sales as insecurity in the job market and limited finance forced customers to postpone their purchases. The only companies whose sales rose in the month were Maruti, Fiat and BMW.

Nevertheless, January sales are the highest after May in this financial year on a month-on-month basis. The lower decline in sales is because of increased preference among consumers to buy the current year’s model.

According to industry players, the impact of the fiscal measures taken by the Government has started generating customer response. But it would still take a while before it gets reflected in actual sales.

“The impact of excise duty cut and lower interest rates has increased showroom enquiries. But sales are expected to remain flat or negative in the current quarter,” said Mr Arvind Saxena, Senior Vice-President, Sales and Marketing, Hyundai Motor India, last week.

Even top executives of other auto companies such as Toyota and BMW have indicated that the first half of the year will be difficult and that demand may be augmented in the second half as a result of the Government’s efforts to stimulate the economy.

“The impact of new models like i20, Xylo is helping companies to post a relatively lower decline in sales. However, as of now the year ahead looks negative for commercial vehicles and may be for passenger cars,” said Mr Dilip Chenoy, Director General, SIAM, while releasing the data.

He said that a faster implementation of the first and the second stimulus package for commercial vehicles and replacement of buses will aid the industry to recover earlier.

Commercial vehicles

The commercial vehicle industry, which has been hit by lack of freight movement amid a slowdown in manufacturing and construction industry, also seems to be recovering. Both Tata Motors and Ashok Leyland recorded an increase in sales and production in January compared with December last year despite a year-on year decline in sales.

In the two-wheeler’s category, scooters sales increased 9 per cent in January compared with the same month last year at 96,107 units. At the same time, limited availability of finance lowered motorcycle sales by 6 per cent to 4.52 lakh units.

Bajaj Auto’s total two-wheeler sales declined by 50 per cent to 66,696 units, a steeper fall compared to TVS Motor whose sales remained almost at the same level at 79,729 units.

Exports

Exports also remained bleak with only passenger vehicles and motorcycles registering a growth. Led by Hyundai and Maruti, passenger vehicles exports in January were up 8.51 per cent at 21,530 units. Motorcycles exports also reported a 20 per cent increase at 68,334 units mainly because of Bajaj Auto selling more vehicles overseas.

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