The Hindu Business Line : Passenger car Q1 sales up 12.6%, motorcycles down 14.4%

New Delhi, July 10 The automobile industry in the first quarter of FY2007-08 has witnessed negative growth in almost all categories, including medium and heavy commercial vehicles, three-wheelers and two-wheelers. However, passenger vehicles, scooters and the light commercial vehicles have shown growth, as per the SIAM data released on Tuesday.

During the quarter, the total number of passenger vehicles grew by 12.99 per cent, with sales at 3,48,832 units. In this category, the passenger car segment recorded the highest growth, of 12.66 per cent at 2,75,147 units. In June, the total passenger vehicles recorded a 15.7 per cent jump in sales, with passenger car sales 16.36 per cent higher, at 94,002 units. Maruti grew by 25 per cent with sales at 47,783 units, while Hyundai, the second largest manufacturer in the segment, recorded a 3.9 per cent dip.

“The passenger car segment has grown mainly due to new launches such as SX4, Logan and Spark. As Maruti is giving a 2 per cent discount on loan rates, consumers are not impacted,” said an analyst from a leading blue-chip securities firm.

The two-wheeler category has shown negative growth in motorcycles, where sales have fallen in the entry-level segment. However scooters and scooterettes continued to show growth. Motorcycle sales during the quarter fell 14.49 per cent, to 13,78,768 units, in contrast to scooters-scooterettes, which registered a 17.97 per cent jump in sales, at 2,56,176 units.

Down: Motorcycles

“Unlike motorcycles, that have shown negative growth on the account of falling sales in the entry-level segment, scooter-scooterette sales have not been affected as they are positioned in the premium category and are mainly purchased as a second vehicle in the household, thus not driven by a squeeze in finance,” said an analyst from B&K Securities India Pvt Limited.

In June, the motorcycle segment saw a decline in sales of 17.16 per cent, at 4,37,776 units, whereas, the scooter-scooterette segment grew by 18.31 per cent, at 91,759 units. Bajaj Auto’s sales fell by 22 per cent to 1,23,273 units in June, compared to Hero Honda, which saw a 9.83 per cent decline in sales to 2,38,195 units. Analysts say it is Bajaj’s higher dependence on lower-middle-class customers in the entry segment that has caused such a big decline, unlike Hero Honda, which has a broader base in the executive and middle-class segment.

“Despite the growth in ungeared scooters or mopeds, it is unlikely to impact the industry as a whole, as motorcycles now comprise 85 per cent of the industry,” said Mr Francis Xavier, Managing Director, Francis Kanoi Marketing Planning Services.