Car sales dip, bikes rev up in FY06

Car sales during the year stood at 8,82,094 units, while bike sales soared 17.1%.

Blistering car sales in the country cooled off in 2005-06, growing by a modest single digit 7.55 per cent on a high base year, even as the outlook appeared bullish following the eight per cent excise duty cut on small cars announced in the budget.

According to figures released by Society of Indian Automobile Manufacturers (SIAM), car sales in the year ended March 31, 2006, stood at 8,82,094 units compared with 8,20,179 units in 2004-05.

The growth in 2005-06, however, was a climbdown from the high 17.7 per cent rise in the year ended March 31, 2005.

Sales are expected to go strong this fiscal with analysts pointing out that the eight per cent excise duty cut on small cars is likely bring in more numbers. This can also be gauged by the high 23 per cent growth in march by when most of the car companies had announced a price cut to pass the excise duty benefit to the consumers.

Motorcycles continued the blitzkrieg as sales soared by 17.1 per cent in the domestic market and touched 58,15,417 units compared with 49,64,753 units in 2004-05.

"Backed on the government's initiative on rural roads and better connectivity with major towns and cities, improved agricultural performance, upward trend of purchasing power in the hands of the rural people, the two-wheeler segment continued to post a steady growth," Siam said.

Overall, the two-wheeler segment, including scooters and motorcycles, grew 13.6 per cent at 70,56,317 units compared with 62,09,765 units in 2004-05.

Interestingly, even as the Moped segment managed to grow 3.1 per cent at 3,32,741 units (3,22,584), the scooter-scooterettee segment saw a 1.5 per cent fall at 9,08,159 units compared with 9,22,428 units in 2004-05.

A crippling strike at segment leader Honda Motorcycle and Scooter India saw the company finish 2005-06 with a low growth of 2.85 per cent, weighing down overall numbers.

Commercial vehicles sales also cooled off in 2005-06, growing 10.1 per cent at 3,50,683 against 3,18,430 units in the previous year. This was triggered by a major downturn in the demand for medium and heavy commercial vehicles, which just managed a 4.5 per cent growth against 23 per cent growth in the year ended march 31, 2005.

However, the light commercial vehicles provided the growth impetus and propelled by Tata's last-mile sub one-tonne transportation vehicle Ace, sales grew 19.4 per cent at 1,43,237 units against 1,19,924 units in 2004-05.

Three-wheelers also rounded up the financial year on a double digit growth as sales rose 17 per cent at 3,60,187 units against 3,07,862 units in 2004-05.

Overall, the domestic automobile industry sales grew 12.8 per cent in 2005-06 at 89,10,224 against 78,97,629 units in 2004-05.

On the exports side, a downturn in the numbers of Maruti Udyog pulled down growth in overseas car shipments to single digits as sales grew a meagre 5.9 per cent growth compared with a high 28.2 per cent in 2004-05.

Car exports in 2005-06 stood at 1,70,193 units with Hyundai Motor India dominating the shipments.