Grim market conditions continue to hit car sales



High interest rates and fuel prices continued to hit demand for new vehicles, with eleven of the country’s leading automobile manufacturers reporting either a decline or marginal growth in sales in June. Together, these companies sold 1,96,466 vehicles in June, compared with 1,78,862 vehicles in the corresponding month last year, a rise of 9.8 per cent.

The volume growth was primarily driven by Maruti Suzuki India, which sold 83,531 vehicles, a rise of 19.3 per cent compared to the year-ago period. However, company executives attributed the rise to the low sales base in June 2011. Demand for small cars such as Alto, WagonR, Estilo and A-Star fell 10.4 per cent to 34,198 units but strong demand for diesel variants of Swift, DZire and Ertiga helped the company record good sales.

At Tata Motors, passenger vehicle sales fell 22 per cent to 17,244 units, owing to weak off-take of the Indica and the Indigo. Sales of the Nano rose three per cent to 5,605 units.

Ford Motor Company and General Motors saw declines of about 10 per cent in sales, which stood at 6,257 units and 7,364 units, respectively, in the domestic market. Honda Siel’s volumes fell 23 per cent to 2,667 units in June. Jnaneswar Sen, senior vice-president (sales and marketing), Honda Siel Cars India, said, “We started this financial year on a high note….However, the current macroeconomic indicators are not very encouraging.”

“The general inflationary trends, high fuel prices and high interest rates are keeping the sentiment low. Unless any trigger is activated, the sentiment is not expected to improve much,” said Arvind Saxena, Director (sales and marketing), Hyundai Motor India Limited. In June, the company’s sales rose 0.2 per cent to 30,450 units in the domestic market.

Mahindra & Mahindra’s sales rose 23 per cent 19,792 units in June.