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Passenger car sales in the Indian market hit a 12-year low in February, declining 25.7 per cent to 158,513 units, as high interest rates and rising fuel costs continued to keep off consumers from showrooms.
With macroeconomic conditions showing little sign of improvement, the Society of Indian Automobile Manufacturers (Siam) said passenger car sales were likely to decline for the current financial year. Sugato Sen, its deputy director general, said, "The decline in February was the biggest since December 2000, when sales declined by 39.9 per cent. The market continues to be extremely difficult as high fuel prices, interest rates and overall macro economic factors are adding to low consumer sentiment. People are putting off discretionary purchases.”
Overall passenger vehicle sales declined 16.7 per cent last month, to 226,484 units. Market leader Maruti Suzuki India showed a decline of nine per cent to 97,955 units and Hyundai Motor India a 7.6 per cent decline to 34,002 units. At Tata Motors, vehicle sales plunged 51 per cent to 19,981 units. (SPUTTERING)
Sen said the higher tax on sports utility vehicles announced in the Union Budget would additionally prove a dampener, on a segment showing traction. "The feedback we have from the companies is that in the next three-four months, they don't see any significant improvement. Even new model launches are unlikely to lift the sentiments. They are, however, optimistic that in the second half of the year, sales may again pick up," he said.
In the current financial year (ending March 31), year-end sales are not expected to provide much respite to the industry. Sen said, "Usually, the last month of the fiscal is the highest selling. However, even if that happens this year, we are unlikely to meet our forecast of zero to one per cent growth (for the year), as we are down by 4.6 per cent in the April-February period.”
According to Siam data, domestic motorcycle sales last month declined 4.9 per cent to 800,185 units from 837,743 units in the same month of the previous year.
Sales of commercial vehicle, a key indicator of economic health, fell for a third month in succession, by 11.1 per cent to 68,388 units. Total sales of vehicles across categories declined 5.5 per cent to 1,451,278 units in February as against 1,534,910 units sold in the corresponding period last year.
