Car sales go off-track again, slide 26% in Feb

The path continues to be treacherous for car sales, which slumped almost 26% – 25.71%, to be specific –  in February, a 12-year low. This is also the fourth consecutive monthly decline as high interest rates and soaring fuel prices wrecked an already faltering demand.  

The figures put out by the industry body, Society of Indian Automobile Manufacturers (SIAM), prove the point. Total passenger vehicle sales also registered an annual drop of 16.67% during the month.

Turns out most car manufacturers have burnt their fingers in February. It was small solace for Maruti Suzuki, which grew a marginal 2.8%, while Hyundai, the second-largest carmaker, saw a dip of 7.62% in its domestic sales in February compared to the same period last year. For Tata Motors, the plunge was as sharp as almost 69% whereas Ford went down 44.12% and GM 20%.

The more difficult part is that India’s annual car sales are headed for a drop for the first time in a decade with passenger cars tumbling 4.64% in April-February. “India’s economy is not doing very well. In such times, the discretionary purchases get hit first and small cars have been affected the most,” said Sugato Sen, deputy director general of SIAM, in New Delhi on Monday.

Even medium and heavy commercial vehicles (M&HCVs) do not seem immune to this weakening trend, whose sales skidded 34.72% in February from a year ago. In two-wheeler segment, only scooters witnessed growth at 2.55% while motorcycles and mopeds lost steam by 4.48% and 0.25%, respectively.

The sluggish demand is also getting reflected in production numbers – the overall fall for February was 3.35%. While passenger cars drooped 14.7%, M&HCV output tanked 47.78% in February compared to the same month last year.

SIAM, of late, has been tweaking targets for the industry as the demand stays on a downhill. As recently as January this year, the industry body revised the sales target for the car industry for the third time to 0-1% for the fiscal year to March 2013.

@Yugac