Car sales dip for the second month in a row

Hike in interest rates and petrol prices have been marring Indian car industry’s growth for the past few months. August saw the decline in sales for the second month in a row with major sufferers being Maruti Suzuki, Tata and Hyundai that witnessed a declination in sales volumes.

Even though Maruti launched the new Swift, the sales dropped by 17% and Maruti predicts single-digit percentages in sales growth this current year. Another manufacturer to have noted a decline in the past few months is Hyundai, again a straight second month, by recording a decline in its domestic sales by 7%, which is a sale of 26,677 products when compared to 28,601 sold in August of last year.

Arvind Saxena, (Marketing/Sales), Director, Hyundai India says currently the market situation is tougher and the prospects of recovery is bleak in the forthcoming months. He feels the current trend in the Indian car market is attributable to hike in interest rates and fuel prices.

Another manufacturer to have recorded a drastic slowdown is Tata Motors, which crashed by an unbelievable 33%. Tata sold 16,829 products compared to 25,212 last August. Growth was further hampered by the sales of Tata Nano, which recorded poor sales of 1202 only, which was lower by 85% when compared to last August.

Ford Motors also joins the bandwagon of sufferers in the industry. They did record a decline in volumes by 7% at 7382 sold when compared to 7925 in August 2010. Even the addition of Fiesta sedan didn’t do much for Ford Motors this time around.

Analysts suggest the growth in the car industry would continue to face challenging times at present with alarming fuel costs and interest rates. Negative factors include high inflation and choppy markets. Car manufacturers are relying on their new models, and with the festive season around the corner with expectations of huge sales, are wishful of a slow but steady growth in the coming months.

We are seeing heavy discounts offered by companies in order to push their sales. Honda recorded a sales growth of 25% (6907) when it slashed City sedan’s price by Rs. 66,000 and Honda Jazz’s price by Rs. 1.6 lakhs. Honda recorded a growth of 35% in August when the City sedan sold around 5819 units.

The decline was seen with bigger companies in India while other manufacturers like Volkswagen, Mahindra and Toyota did manage healthy growth. Toyota did record a sales growth of 84% by the additions of Liva and Etios sedan when they sold 11,693 units compared to 6391 in August 2010. Mahindra recorded a steady 13.5% growth at 15,664 and Volkswagen a bit higher at 6901 units to 95%.

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