Auto sales drop 4.7% y-o-y

Marking a forgettable year for the Indian automobile industry, marred by high interest rates and lack of finance availability, vehicle sales in the country dropped by 4.7 per cent in 2007-08.

The drop in sales was mainly on account of the two-wheeler industry, particularly motorcycles, which declined by 7.92 per cent and 11.9 per cent respectively despite the passenger cars registering 12.2 per cent growth.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM), total domestic vehicle sales in 2007-08 was down at 96,48,105 units, compared with 10,123,988 units in the previous financial year.

Domestic passenger car sales rose by 11.79 per cent in 2007-08 to 12,03,531 units from 10,765,82 units in the April to March period of the earlier financial year.

Motorcycle sales in the country were down by 11.9 per cent at 57,683,41 units in financial year 2008, against 65,47,195 units in 2006-07.

Total two-wheeler sales in 2007-08 also slipped 7.92 per cent at 72,486,00 units, compared to 78,723,34 units in the year-ago period.

The sales of commercial vehicle during the last fiscal increased by 4.07 per cent to 4,86,817 units from 4,67,765 units in 2006-07, SIAM said.

Commenting on the sales performance of the fiscal gone-by, SIAM Director General Dilip Chenoy said the year was a tough one, particularly for the two wheeler industry.

"Lack of finance availability specially in semi-urban and rural areas, coupled with high interest rates hurt sales," he said, adding the trend was likely to continue in the ongoing fiscal.

Chenoy said the industry has been up against many factors during the year and rising input costs specially that of steel has added to the problem.

"Taking into consideration only steel that manufacturers use and not including components, the industry would need a price hike between Rs 750 for two wheelers at the lower end and up to Rs 1 lakh for commercial vehicles at the upper end," he said.

Yet, in a declining market it is a very difficult proposition to raise product prices, he added.

In March, however, the scene appeared better with domestic passenger car sales rising by 12.2 per cent to 1,28,074 units from 1,14,145 units in the same month last year.

Leading the growth was Hyundai Motor India, which clocked 29,396 units, against 19,242 units last year, up 52.77 per cent. Country's largest car-maker Maruti Suzuki India registered 6.24 per cent sales growth at 55,758 units, against 55,623 units last year.

Tata Motors registered a decline of 7.5 per cent during the month at 18,177 units, against 19,651 units last year.

As per SIAM figures, motorcycle sales in the country during the month was down by 0.04 per cent at 5,06,884 units, against 5,07,124 units in the same month last year.

This was despite market leader Hero Honda registering 14.65 per cent increase at 3,01,817 units, against 2,63,242 units in the same month last year.

Bajaj Auto sales were down by 18.5 per cent at 1,13,657 units, compared to 1,39,460 units last year.

Total two-wheeler sales in March also slipped by 0.41 per cent at 6,30,976 units, compared to 6,33,591 units in the same month last year, SIAM said.

In the scooter segment, sales during the month fell by 5.07 per cent at 83,022 units, compared to 87,459 units in the corresponding period last year, SIAM said.

Market leader Honda Motorcycle and Scooter India recorded a dip of 6.89 per cent at 52,967 units, against 56,895 units in the same month last year. Hero Honda's scooter sales increased by 41.48 per cent at 6,235 units, against 4,407 units last year.

Three wheeler sales in the month were down by 15 per cent at 29,654 units, against 34,901 units in the same month a year ago.

In the commercial vehicle category, sales during the month increased by 14.16 per cent to 56,262 units from 49,281 units for the year-ago period, SIAM said.