Domestic car sales growth slowest in 24 months at 7 per cent in May
Domestic passenger car sales posted the slowest growth in 24 months in May this year at 7 per cent as rising fuel prices and interest rates discouraged customers from new purchases.
According to figures released by the Society of Indian Automobile Manufacturers (SIAM) today, car sales in the country stood at 1,58,817 units in May, 2011, as against 1,48,425 units in the same month last year.
"This is the slowest growth rate since May, 2009, when the increase was just 2.77 per cent," SIAM Senior Director Sugato Sen told reporters here.
The last time that car sales grew by just single digit was in June, 2009, at 8.23 per cent, and since then, the industry has been witnessing healthy double-digit growth, he added.
"In retail sales, there are some bottlenecks like higher interest rates, non-availability of finance, rising fuel prices and higher prices of vehicles. The sentiment in the market is not very positive and next month, we expect this to reflect in the sales numbers," Sen said.
Under these circumstances, he said it is unlikely that the passenger car sales forecast for the fiscal would be achieved.
"... But we have not reviewed it yet. The review will be done next month when we will complete the first quarter of this fiscal," Sen said.
SIAM had projected a growth of 16-18 per cent in passenger car sales for the 2011-12 fiscal, while the overall industry was expected to grow by 12.15 per cent.
"One of the biggest worries is that RBI has changed the specification of the NBFCs. Now NBFCs cannot provide loans for purchasing non-transport vehicles, which are personal vehicles. They won't get the re-finance from banks. This will hurt the industry severely," he said.
During the month, Maruti Suzuki India posted just a 0.99 per cent increase in domestic car sales to 76,874 units, while that of rival Hyundai Motor India Ltd was 14.18 per cent at 31,001. Tata Motors saw a decline of 12.56 per cent in sales to 16,280 units during the month.
According to SIAM, total two-wheeler sales, however, increased by 14.49 per cent last month to 10,72,287 units from 9,36,555 units in May, 2010.
Motorcycle sales grew by 14.33 per cent during the month to 8,29,255 units from 7,25,311 units in the corresponding month last year.
Hero Honda continued its impressive performance with a 13.54 per cent increase in sales to 4,55,662 units. Rival Bajaj Auto also posted a 13.87 per cent increase to 2,18,321 units during the month, while Honda Motorcycle and Scooter India (HMSI) saw its bike sales grow by 10.2 per cent to 60,733 units.
