Rising fuel costs, interest rates and vehicle prices have pulled down growth of the auto sector in May to 13 per cent year-on-year. Such a drop was last seen almost two years ago in September 2009 (9.64 per cent).
The Society of Indian Automobile Manufacturers (SIAM) indicates that June sales may be even lower. The drop in May was after an annual 23 per cent growth in April and a 19 per cent increase in March.
“We feel the first quarter (this fiscal) sales numbers will be bad. This is because at retail levels, vehicles are not moving. Certain models have a waiting period, but others are not selling and the dealer inventories are piling up,” Mr Sugato Sen, Senior Director, SIAM, told
According to the data, passenger vehicle sales in May grew 8 per cent — the lowest overall. This includes passenger car sales growth at 7 per cent (1.58 lakh units). This is despite a 19 per cent increase in car production in April-May.
On whether the sales numbers could lead SIAM to revise its annual growth target, Mr Sen said, “The review will be done next month when we will complete the first quarter of this fiscal.”
SIAM had projected a growth of 16-18 per cent in passenger car sales for FY 12, while the overall industry was expected to grow 12 per cent.
Maruti Suzuki had posted its slowest growth in more than two years this May at 2 per cent, while Hyundai followed suit with a similar growth.
Two-wheeler sales were not impacted much, posting a growth of 14.5 per cent annualised. Hero Honda posted 13 per cent increase, while Bajaj Auto saw a 14 per cent jump. Honda Motorcycle and Scooters' sales grew 10 per cent.