Passenger car sales rise after 10 months

Surge has come on low base due to mont-long lock-out at Maruti Suzuki's Manesar facility last year

Even though sales of passenger cars in the domestic market grew for the first time in ten months in August, annual sales are expected to remain in the negative zone according to industry body Society of Indian Automobile Manufacturers (SIAM).

Data available with SIAM shows though sales of passenger cars increased by 15.37% to 133,486 units last month, the surge has come on a low base due to a mont-long lock-out at Maruti Suzuki’s Manesar facility last year.

Sugato Sen, deputy director general, SIAM said, "The increase is not a reflection of the market conditions. This is mainly due to Maruti's numbers compared to last year. The tough market conditions still remain. Interest rates are high, fuel prices continue to be high while sentiments are extremely low.”

Sales at Maruti Suzuki increased by 51.64% to 76,018 units in August this year. The company had sold 50,129 units in the corresponding period last year. SIAM held that the spurt in car sales in August is unlikely to be sustained next month and recovery in the industry could take a while.

"For this fiscal, we are staring down at a decline in car sales. If we have to match last year's 2.7 million units, we need to be selling over 200,000 units each month but in the last three months, we have sold less than that," Sen added. While Hyundai Motor India Ltd registered a marginal increase during the month at 28,311 units, sales at Tata Motors plunged by 38.29 17,973 units.

The good monsoons had a positive impact on demand in rural areas with overall off-take of two-wheelers going up by 6.68% to 1,128,598 units.

"The good monsoon has had an impact on rural sales of two-wheelers, specially that of motorcycles. We expect this to continue and the rural demand could also have a slight positive impact on car sales," Sen said.

Sales of commercial vehicles, however, continued to slide dropping by 23,11% to 51,334 units. Sen said the medium and heavy commercial vehicles segment (M&HCV) has been badly affected and it witnessed a decline for the 18th consecutive month. During the month, M&HCV sales were down 38.24% at 15,468 units.

Total sale of vehicles across categories registered a growth of 4.47% at 14,12,512 units in August 2013 as against 13,52,025 units in the same month of 2012.