Decline biggest since November 2008 and first after January 2009; industry logs 8.99% growth at 1348,753 units.
However, the overall industry logged a 8.99 per cent rise in sales at 1348,753 units, compared to 1237,521 units in the same month last year, boosted by strong sales of two-wheelers and commercial vehicles.
Passenger car sales declined 15.76 per cent to 133,747 units, from 158,767 units a year earlier, data from the Society of Indian Automobile Manufacturers (Siam) showed on Wednesday.
| PLUMMETING NUMBERS | |||
| Category | Jul-10 | Jul-11 | % CHANGE |
| Passenger Vehicles | 201,704 | 183,657 | -8.95 |
| Two wheelers | 938.514 | 1,056.91 | 12.61 |
| Commercial Vehicles | 51,934 | 64,241 | 23.7 |
| Three-wheelers | 45,369 | 43,949 | -3.13 |
Sugato Sen, senior director at Siam, said, “The last time such a sharp decline in passenger car sales recorded was in November 2008. Sales had declined by 19.34 per cent at the time.” This was also the first drop since January 2009 when car sales fell 3.16 per cent.
“The recent hike in interest rates, coupled with the increase in fuel prices, has affected the consumer sentiment negatively. With reports of meltdown in markets worldwide, customers are exercising caution and postponing purchase decisions,” said Vishnu Mathur, director general, Siam.
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The sales figures were also impacted by MSIL, which reported a loss of 17,000 units due to changes in the production process at the company’s Manesar plant. MSIL recorded a 26 per cent decline in sales at 66,504 units, as it stopped making the Swift hatchback ahead of the introduction of an upgraded version later this month and shifted production of the DZire sedan from Manesar to Gurgaon. It had sold 90,114 cars in July 2010.
Sales at Hyundai Motor India were down by 11.49 per cent at 25,642 units. Tata Motors fared worse, with a 38 per cent drop in sales at 17,192 units. Sales fell across the Indica, Indigo and utility vehicles’ range, with small car Nano recording the steepest drop of 64 per cent at 3,260 units.
Mathur said, “Interest rates and fuel prices are challenges for the market. Hopefully, interest rates have reached their peak... If crude continues to soften, then there may be some positive impact, as it will lead to inflation coming down. The forthcoming festive season is also likely to help car makers push sales, but to what extent it can boost growth has to be looked at.”
Exports of passenger cars grew 40.83 per cent in July due to an increase in demand from non-European nations in recent months. Car makers sold 48,091 units in overseas markets, compared to 34,149 units in the corresponding period last year. Hyundai, the largest exporter of cars, reported an increase of 11 per cent in overseas sales at 24,025 units. Ford also logged fourfold growth in exports at 3,202 units.
Two-wheeler sales rose 12.61 per cent to 1056,906 units, from 938,514 units in July 2010. While motorcycle sales grew 10.51 per cent to 785,278 units from 710,621 units, the scooter segment witnessed 23 per cent growth at 205,695 units. Hero MotoCorp’s (formerly Hero Honda) sales jumped 13.89 per cent to 443,948 units. Bajaj Auto registered an increase of 5.30 per cent at 202,326 units.
Sales of commercial vehicles rose 23.70 per cent to 64,241 units, from 51,934 units in the year-ago period. Light commercial vehicle sales grew 35.95 per cent to 37,111 units.