Meltdown fails to make a dent in car sales in Punjab

In spite of the ongoing credit squeeze and financial meltdown, the demand for small and mid-size segment cars has not been affected much in Punjab. Even the sale receipts of luxury cars have registered a sharp increase.

Maruti Udyog, the country’s leading car maker, has registered an increase of 5 per cent in sales during the April-November period of the current financial year, over the corresponding period last year. It expects to post similar growth in the current financial year as well. The company has high expectations from its newly launched car, A-star, from the Punjab market and expects that it will help in achieving the desired growth.

On the other hand, Hyundai Motor India Ltd has registered a 14.37 per cent increase during the January-November period, over the corresponding period a year ago. The company has sold 14,130 units during this period, compared with 12,355 units in the year-ago period.

Sources in Tata Motors disclosed that the company’s sales during the April-November period this year has been hit by 10 per cent. However, the company registered an increase of 12 per cent in the sales in October and November as compared to the corresponding months last year.

Further, company officials are hopeful of achieving an increase of 15 per cent in December due to recent initiatives taken by the government including cut in the interest rate as well as a 4 per cent reduction in the Cenvat rate.

This apart, the sale of luxury cars in the region has been unaffected by the current financial turmoil.

Speaking to Business Standard, Manjit Singh Bala, managing director of Tai-Pan Traders Ltd that handles sales and service of Mercedes-Benz, said: “I don’t think that the recent credit crunch has affected the sales. Last year, we sold 175 cars between January and December in Punjab (including Chandigarh). This year, we have already sold 280 cars. Further, we expect that the recent cut in interest rate will boost the sales.”

On being asked about the potential buyers, he added, “normally we are looking at buyers who want to graduate from other variants manufactured by other car manufacturers.”

Echoing similar sentiment, Sachit Passi, partner of Krishna Automobiles, which handles BMW sales, is hopeful of achieving the current year’s target.

BMW hopes to sell 250 cars in Punjab this year, compared to 147 units last year.

Honda Motors has registered significant growth in the Punjab market during the April-November period as compared to previous year. The company officials are of the view that recent credit crunch and high interest rate has very little impact on sales. Dealers expects that recent initiatives taken by the government like cut in interest rate and cut in Cenvat by four per cent would give new dimensions to sales.

It is worth noting that BMW opened its operation in Chandigarh in April last year. Even Audi dealership is hopeful to achieve its target and are of the view that recent credit crunch has not affected thier sales.