Delayed rains cloud car sales

Delayed monsoon is proving to be a party pooper for passenger vehicle sales. Dealers across the country have reported increasing stocks, from an estimated comfort level of two weeks to four weeks in important markets such as Delhi and Mumbai.

Dealers, who handle multiple brands and models in Delhi, reported that although pre-monsoon sales usually see a slump, the situation is worse this year.

"Although the off-take before monsoon is normally low, this year we have seen the stock position move to four weeks sales, which is about two weeks stock more than last year's," said Ashok Sachdev, a a Delhi-based dealer for Hyundai, Toyota and Ford.

Although stock levels are expected to fall to acceptable levels over the next four to six weeks, the next big push for sales is not likely to come until the festival season in September, according to dealers.

The pile-up at dealers' end would effectively mean that the first quarter sales for the passenger vehicle segment will prove to be relatively less buoyant.

"The pre-monsoon period has historically been dull for automobile sales in the country. Though June this year has been a dull month thus far, there are already indications that this could improve a bit by end of this month and the overall sales in the first quarter of this financial year could be encouraging," said Jayendra Kachalia, president of Federation of Automobile Dealers Association.

In the first two months of this financial year, passenger vehicle sales reported a 13 per cent growth, with total volumes in the domestic market at 171,194 units, according to monthly flash reports from Society of Indian Automobile Manufacturers.

The growth in this segment has been low compared with the 22 per cent growth in the two-wheeler market and a20 per cent growth in the overall automobile market (which includes commercial vehicles, passenger cars and two wheelers.) in the first two months of this financial year.

Market sources said the recent price cut by Hyundai (on the Santro) and Maruti on the 800, have kindled further price cut expectations in the market, forcing prospective buyers to postpone their purchases.

A Toyota Kirloskar spokesperson said despite the urbanisation of major car markets in the country, sales are still closely linked to the monsoon, given its impact on rural prosperity.