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Domestic car sales posted a 15.76 per cent decline in July, the first time after January 2009. This can be primarily attributed to the hike in lending rates, rising fuel prices and lower production by market leader, Maruti Suzuki, according to the Society of Indian Automobile Manufacturers (SIAM).
The domestic passenger car segment clocked sales of 1,33,747 units against 1,58,767 in July last, according to figures released by SIAM on Wednesday. Last month's decline is the steepest since November 2008, when car sales fell by 19.34 per cent.
“This is the first time since January 2009 that car sales have fallen and the onus lies with rising interest rates and fuel prices, besides Maruti lowering production,” the SIAM Director-General, Mr Vishnu Mathur, told reporters.
Maruti factor
Production loss at Maruti's Manesar facility due to preparations for the new Swift and realignment of its DZiRE model's output was also a factor. “The nearly 22,000 decline in sales numbers is because of this single reason,” Mr Mathur added.
Maruti Suzuki India's sales were down 31.04 per cent to 52,483 units. Hyundai Motor India's saw an 11.49 per cent fall to 25,501 units, and Tata Motors posted a 43.13 per cent dip at 13,997 units.
Outlook
On the future outlook, Mr Mathur said, “There are good many car launches lined up. Hopefully, they should spur the market. Also, if crude continues to soften, we can expect a rebound.”
The auto industry has started slowing down this fiscal, with the passenger car segment growing by only 7 per cent in May, and its slowest 1.62 per cent in 27 months in June.
Last month, SIAM had revised the growth projection downward to 10-12 per cent for 2011-12 against its earlier forecast of 16-18 per cent.
Light commercial vehicle sales grew 35.95 per cent to 37,111 units from 27,297 units. Medium and heavy commercial vehicle sales stood at 27,130 units against 24,637 units, up 10.12 per cent, SIAM said. Total domestic sales stood at 1,348,753 units in July 2011 against 1,237,521 units in the year ago period, up 8.99 per cent.
EXPORT GROWTH
Car makers sold 48,091 units in overseas market last month compared with 34,149 units in the corresponding period last year, up 40.83 per cent, due to increase in demand from non-European nations.
Ford's exports rose more than 300 per cent on account of robust sale of its small car, Figo, in various new markets. The country's largest car exporter, Hyundai Motor India, despatched 24,025 units in July, up 11.23 per cent.
Maruti Suzuki India's exports, however, declined by 17.50 per cent to 8,741 units.
Total exports rose by 33.35 per cent in July, over the corresponding month last year.
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