The automobile sector continued to drive in the slow lane in June, with most companies reporting lower sales during the month. The reasons range from a falling rupee and rising fuel costs to high loan costs.

Market leader Maruti Suzuki reported a 12.56 per cent dip in total sales (including exports) over June 2012, but for Tata Motors the skid was 18 per cent. Mahindra & Mahindra’s sales dipped 7.8 per cent while Hyundai bucked the trend with a 1 per cent rise in sales. .

Toyota Kirloskar Motor’s total sales fell 19 per cent and VE Commercial Vehicles by 18.8 per cent.

“Commercial vehicle sales are generally linked to the economy and business performance. Passenger vehicles sales have been posting depressing numbers for the past eight months on weak consumer sentiment. Customers have also been deferring purchases for some time now,” said Kapil Arora, Partner (Automotive Practice), Ernst and Young.

DOMESTIC SALES

Domestic sales for most companies fell in June , with Toyota Kirloskar skidding 25 per cent and VE Commercial Vehicles by 17.97 per cent. Tata Motors (16 per cent), Maruti Suzuki India (7.8 per cent) and M&M (7 per cent) were others to record a fall in domestic sales.

“Currently, the Indian automotive industry is going through a moderation phase both in terms of passenger and commercial vehicles. Economic activities have almost come to a standstill and the market continues to be sluggish. Moreover, the impact of higher interest rates and fuel prices has dented the overall momentum,” said Amit Kaushik, Principal Analyst, Auto, at IHS Automotive India.

M&M’s farm equipment division bucked the trend by posting a 19 per cent increase in domestic sales.

> rajesh.kurup@thehindu.co.in

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