Slowdown hits two-wheelers and commercial vehicles

After holding on for many months, two-wheeler sales took a hit in July on rising fuel prices, high interest rates and a negative customer sentiment because of delayed monsoon.

The combined impact of the dismal growth in both commercial vehicle (CV) and three-wheeler sales has slowed the growth of the auto industry during the month. Overall vehicle sales rose 7.53 per cent to 1.44 million units in July, slower than the nine per cent (1.48 million units) recorded in June.

July’s commercial vehicles sales growth of 1.20 per cent to 65,008 units was the slowest since June 2009 — when the segment was actually in the red. Medium and heavy vehicles were worst hit with a 15 per cent drop in sales in July to 23,171 units.

Passenger Vehicle Improves

The only saving grace was the passenger vehicle segment (including cars, utility vehicles and vans). July sales in this segment rose 11.80 per cent to 2.04 lakh units largely because of the low base of last year and higher demand for diesel models; utility vehicle sales were up 62 per cent.

However, Vishnu Mathur, Director-General, Society of Indian Automobile Manufacturers, feels that even this joy may be short-lived. “Car sales were the lowest since October last year. Sales in passenger vehicles will see a hit in the next few months because of the shutdown of Maruti’s Manesar plant that makes the popular Swift and Dzire models.”

Maruti Suzuki, which accounts for 38 per cent of all passenger vehicles sales, saw sales rise 7 per cent to 71,024 units, while rival Hyundai’s sales jumped 8 per cent to 27,585 units.

Tata Motors’ was a surprise package with a 51 per cent jump in sales to 32,730 units in July; in June, sales had dropped 14 per cent to 22,551 units.

Two-Wheeler Sales

Scooter sales growth of 20 per cent to 2.47 lakh units helped the segment make up for slower bike sales; July sales rose 5 per cent to 8.21 lakh units. Both Hero MotoCorp and Bajaj Auto saw sales fall by around a percentage point. Till last month, they had been growing. Aided by its scooter range, Honda bucked the trend with a 60 per cent growth in sales to 2.27 lakh units.

Three-wheeler sales continued to slow and were up 0.77 per cent at 44,286 units in July. In June, three-wheeler sales had grown 4 per cent at 42,079 units.

(This article was published on August 9, 2012)
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