The growth rate clocked by the auto industry in the first six months of 2011-12 shows that the moderation has indeed become deep-rooted. Against the 27-per cent growth recorded in April-September 2010, the industry has grown at a lower 14 per cent this time. Surprisingly, while medium and heavy commercial vehicles volumes (generally the first to take a hit during a slowdown) have grown by 6 per cent during this period, it is the passenger vehicles that have contributed the maximum to the moderation. Together, domestic sales volumes for passenger vehicles (cars, utility vehicles and vans) have grown only by about 1.8 per cent in April-September 2011.
Cars, the culprit
A dissection of the passenger vehicles segment however, shows that utility vehicles and vans have fared well, growing by 9 per cent and 19 per cent respectively. It is the cars segment, which forms bulk of the volumes that has shown a fall. Domestic car sales volumes have actually contracted by about 1.5 per cent during this period, thanks to dampened sentiments from rising inflation, interest costs and fuel prices.
The segment-wise sales volumes put out by SIAM (Society of Indian Automobile Manufacturers) for April-September 2011 shows that the year-on-year fall in volumes is widespread, beginning from the micro (Nano), mini and compact segments up to the executive and premium segments. While in the ‘mini' segment, cars such as the Spark, A-Star, Alto and Wagon R have been the principal under-performers, the Figo, i10, Getz, i20, Indica, Indigo CS, Ritz, Swift and Estilo have pulled down the performance of the ‘compact' segment cars. Overall growth in these two high-volume segments has shrunk by 4 per cent and 5 per cent respectively in the last six months. Volumes in executive and premium segment cars such as the Linea, Civic, Laura , Corolla, Jetta, Accord and Camry too have taken a hit.
Pockets of high growth
This volume de-growth story though has its exceptions. New car launches and refurbishment of existing models has been a primary reason for good growth in some pockets. For example, thanks to the Etios launched earlier this year, volumes in the ‘super compact' segment (Accent, Verito, Dzire and Etios) has shown a 32.5 per cent growth although sales of Dzire, which form 55 per cent of the total volumes in this segment, has dropped by 10 per cent. The newer Volkswagen Vento and a refreshed Verna from Hyundai has helped the mid-size segment (such as Ikon, Fiesta, Lancer, City, SX4, Manza) clock a 13.7-per-cent volume growth. Similarly, newer vehicles such as the Nissan Micra, the Etios Liva and the Polo have shown good volume growth in the compact segment, despite the overall sluggishness. Given the high petrol prices, the availability of diesel versions in most of these cars could have also been another reason for the higher growth.