High Rates, Fuel Costs Dent Car Sales

 

 

Passenger car sales fall 10% to144,156 units in August

OUR BUREAU NEW DELHI

    Fewer buyers drove out of showrooms in new cars for the second successive month in August, following the central bank’s serial intervention aimed at easing demand in the economy to tame inflation. Production cuts at two of the bigger carmakers, coupled with high fuel prices, compounded the challenge for the auto industry, dragging down car sales 10%, even as two-wheelers posted a 16% growth. Passenger car sales declined 10% to 144,156 units, a month after the industry reported a 16% slowdown in July. Market leader Maruti Suzuki, which sells every second car in the Indian market, posted a 19.21% decline in sales, to 63,296 units, as it continued to face labour unrest at its factory in Manesar. Referring to Maruti’s labour problems and a two-week maintenance shutdown of a Tata Motors plant in Sanand in Gujarat, Society of Indian Automobile Manufacturers’ Director General Vishnu Mathur said, “Production has also been affected with large players not able to churn out optimum production in August.” While Tata Motors reported a 39.45% decline to 13,508 units, Hyundai Motors posted a 7.51% decline in sales to 26,451 units.
Industry players said the September-November period would prove critical. “While the new launches will propel the sales in coming months, the prevailing high interest rates and prices of fuel could spoil the customer sentiment,” Hyundai’s director (marketing & sales) Arvind Saxena said.
All eyes in the industry are now on the slew of new launches and the upcoming festive season. “The Indian market has strong fundamentals and is expected to outperform most automotive markets in the region. This (slowdown) is a temporary phenomenon and as we move forward the real potential is expected to bring it back on the track,” Jeffrey M Henning, analyst with international consultancy Ernst & Young said. According to figures released by SIAM, the market for two-wheelers remained robust with sales growing by 16% to 11.11 lakh units.