Monsoon progress to determine further sales growth: SIAM

Healthy progress of monsoon, easing of interest rates and gradual recovery in the economy will support the automobile industry in the coming months, the apex automobile industry body said on Thursday.

"We are seeing a flat to negative rural demand. This scenario can be reversed if there is a good monsoon this year. Till now the monsoon have been alright and we expect its progress to continue," Vishnu Mathur, director general of Society of Indian Automobile Manufacturers (SIAM) told IANS.

"A pick-up in rural demand will positively impact-- two wheelers, utility vehicles and small car sales."

According to Mathur, the slowdown in the passenger vehicle sales in June was due to supply constraints as three major players like Maruti Suzuki, Toyota and Tata Motors had a planned maintenance shutdown at their factories.

Mathur further said that the industry is growing at a slow pace and that the recovery is on a low base.

"We have not yet touched the peak levels of 2011-12. The growth is slow and that recovery will take time. However, the fundamental factors to support the growth are there," Mathur said.

"There is also a scope for further rate cut from banks as they have not yet fully transmitted the repo rate cuts announced by the Reserve Bank of India (RBI) earlier."

On the exports front the industry body, said that the healthy growth should continue as new markets are being tapped and that the trade barriers are being removed in markets such as Sri Lanka and Algeria.

Data furnished by SIAM showed that the exports for June zoomed by 16.53 percent at 315,800 units. Exports for the first quarter (Q1) of the current fiscal went up by 9.22 percent at 915,895 units.

However, the domestic passenger car sales during June grew by only 1.53 percent at 162,677 units. Whereas, it grew by 8.57 percent in the Q1 at 482,332 units.

The total passenger vehicle sales, which include cars, utility vehicles and vans, slipped by 0.54 percent in June to 217,642 units. It grew by 6.17 percent in Q1 and stood at 653,302 units.

Overall commercial vehicles sales inched up by 0.72 percent in June and stood at 51,446 units. It was higher by 3.55 percent in Q1 at 146,159 units.

Sales of two-wheelers last month gained by 3.55 percent to 1,307,710 units. While, it had marginally gained by 0.64 percent at 3,975,724 units in Q1.

Total automobile sales in June gained by 2.56 percent at 1,620,673 units. It marginally rose by 1.24 percent at 4,888,226 units during Q1.