The Society of Indian Automobile Manufacturers (SIAM) plans to lower the growth projections for the fiscal on the back of a lacklustre performance in auto sales in the year till August.
Overall vehicle sales were down four per cent in the month, with exports dipping 12 per cent.
In August, car sales fell 19 per cent to 1.18 lakh units. With about a 40 per cent market share, Maruti Suzuki’s closure of the troubled Manesar plant in July-August was attributed as the main reason for the decline.
The plant restarted operations on August 21 (closed since July 18), but at less than a fourth of its original capacity. Maruti posted a 35 per cent drop to 50,129 units in the month.
Total passenger vehicle (PV) sales fell sharply by four per cent (passenger vehicles includes cars, utility vehicles and vans), largely because of a 71 per cent growth seen in diesel-dominated UV sales, led by Mahindra and Tata Motors.
“Every quarter we revisit our forecast. If you look at the numbers this time, it is obvious it will be revised downwards, but the announcement will be next month,” said Sugato Sen, Senior Director at SIAM.
Two-Wheelers
Two-wheelers in August recorded negative growth for the first time in over three-and-a-half years.
Sales fell 4.5 per cent to 1.05 million units, with market leader Hero MotoCorp recording a 12 per cent drop to 4.31 lakh units.
Burdened by inventory pile-ups, two-wheeler firms have reportedly cut production between 10 per cent and 20 per cent last month.
They now expect festival season demand to clear stocks.
Meanwhile, commercial vehicle sales rose four per cent in August, led by a 13 per cent growth in light CV sales.
“Only LCVs showed a positive growth, but M&HCV is down denoting weak economic activity,” Sen said.
Exports
Maruti’s problems hit overall car exports hard as well – the company exports A-Star and Dzire from the Manesar plant.
Car exports fell 27 per cent in August to 36,104 units, while the industry exports dropped 12 per cent to 2.31 lakh units.
The slowdown in Europe has had the worst impact on domestic car exports for last many months.
Hyundai and Nissan, the biggest exporters of cars, also posted a 23 per cent and 16 per cent, respectively, decline in overseas sales.