Domestic car sales down 9%; SIAM seeks stimulus package

According to the latest figures, domestic car sales stood at 1,39,632 units in June as against 1,53,450 units in the same month last year.

Updated: Jul 12, 2013, 13:42 PM IST

New Delhi: Car sales in India fell for a record eighth month in row in June with a dip of 9 percent as economic slowdown and low consumer sentiments continue to hit demand, prompting industry body SIAM to seek stimulus package for the automobile sector from the government.

With actual sales in the first quarter of this fiscal turning out to be wide off the mark from what it had forecast in April, Society of Indian Automobile Manufacturers (SIAM) stayed away from revising sales projections it had made in April this year and stated that even those targets were unlikely to be met, except in two-wheeler segment.

According to the latest figures, domestic car sales stood at 1,39,632 units in June as against 1,53,450 units in the same month last year.

"The slow economic growth, high interest rates and fuel prices, high inflation are all affecting consumer sentiments. Government needs to have a re-look and bring a stimulus package for the auto industry which will help in achieving higher growth," SIAM President S Sandilya told reporters here.

SIAM is looking at the a stimulus package similar to the one given during the 2008-09 downturn, in which excise duty on two-wheelers, small cars and commercial vehicles were reduced to 8 per cent, SIAM Director General Vishnu Mathur said.

He, however, said the industry body has not yet approached the government for the same.

In June, market leader Maruti Suzuki India posted 8.17 percent decline in domestic sales at 65,172 units as against 70,977 units in the corresponding month last year.

Hyundai Motor India Ltd posted a marginal increase in car sales to 30,577 units from 30,363 units in June last year, while Tata Motors had a decline of 29.17 percent to 9,628 units from 13,595 units in the same month last year.

Homegrown major Mahindra & Mahindra posted 17.17 percent decline in its utility vehicle sales at 15,916 units from 19,348 units in June last year.

"Utility vehicle sales have been affected by hike in excise duty to 30 percent from 27 percent announced in this year's Budget," Mathur said, adding that high cost of ownership has also deterred buyers of entry level segment cars.

On the forecast, Sandilya said in the April-June period this fiscal, domestic car sales declined by 10.41 percent as against 3-5 percent increase forecast in April. Similarly, two-wheeler sales also dipped by 0.82 percent against a forecast of 6-8 percent, commercial vehicles were down by 8.12 percent against a projected growth of 7-9 percent.

"In such a volatile scenario, we thought it doesn't make a sense to give a revised forecast now," he said, adding it was unlikely that the growth projection made in April would be met in almost all the segments this fiscal, except two-wheelers.

According to the SIAM data, motorcycle sales in last month declined by 9.16 per cent to 7,99,139 units from 8,79,721 units in the same month previous year.

Market leader Hero MotoCorp registered 10.14 percent decline at 4,39,845 units, while rival Bajaj Auto saw its sales dip by 24.5 percent to 1,59,688 units in June.

Honda Motorcycle & Scooter India (HMSI) saw its bike sales grow by 19.28 percent to 1,13,700 units in June this year.

SIAM said scooter sales in June grew by 15.16 percent to 2,58,224 units as against 2,24,224 units in the year-ago month.

HMSI registered 5.17 percent increase in its scooter sales go 1,27,154 units, while Hero MotoCorp had 61.93 percent increase in scooter sales to 52,312 units in June this year. Chennai-based TVS Motor Co posted 1.92 per cent decline in scooter sales to 36,969 units during the same month.

Total two-wheeler sales in June 2013 declined by 4.56 percent to 11,16,424 units from 11,69,741 units in the same period of previous year, SIAM said.

"With 50 percent of the two-wheeler sales coming from rural areas, we hope that the monsoon, which is average or above average so far, will have a positive impact on sales," Mathur said.

Three-wheeler sales in June this year declined by 8.71 percent to 38,414 units as against 42,081 units in the same month last year.

Total sales of commercial vehicles declined by 13.45 percent to 56,197 units from 64,928 units in the year-ago period, SIAM said.

"The commercial vehicles segment is the most depressing scenario. This is the 15th successive month of decline in the segment as there is overall slowdown in economy and freight movement has been affected," Mathur said.

Total sales of vehicles across categories registered a decline of 5.10 percent to 14,07,767 units in June 2013 as against 14,83,443 units in the same month of 2012, it added.