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Car sales post biggest decline in one year

Drop 10.15% in April as consumer sentiment remains negative

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Car sales continued to remain subdued in the new financial year, as volumes for the industry dipped 10.15% in April compared with the same month last year.

According to data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday, domestic passenger car sales in April stood at to 135,433 units as compared with 150,737 units in the April 2013.
As per the industry body, the decline of 10.15% in car sales is the biggest decline since May 2013, when they dropped 11.7%.

Explaining the reasons for the continued sales dip despite reduction in excise duty in the Budget, SIAM deputy director, Sugato Sen, told reporters in New Delhi, "What is happening is that we are unable to recover from the negative sentiment. We need a trigger to change the sentiment."

The government, in its interim Budget in February, announced a reduction in excise duty by 6-8% for cars and sports utility vehicles (SUVs), in order to boost passenger vehicle sales.

Sen said the change would be possible only after a new government comes to power and announces measures to kick-start the economic growth in the full Budget.

The industry continues to remain subdued on account of higher interest rates, rising fuel prices and overall slowdown in the economy.

"Today, even after the cut, the cost of ownership is extremely high. The small car customers are most vulnerable under the current circumstances," said Sen.

According to SIAM data, the country's largest carmaker Maruti Suzuki India saw 14% decline in its domestic sales at 65,786 units in April as against 76,509 units in the same month last year. Its rival Hyundai Motor India, however, posted an 8.48% increase at 35,110 units as compared with 32,364 units in April last year.

Two-wheeler sales continued the positive territory as total sales in April grew 11.67% to 13,04,447 units as against 11,68,100 units in the same month last year.

Motorcycle sales grew 8.06% at 911,908 units last month from 843,909 units notched in the year-ago period, while scooters rose 26.08% during the month.

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