Vehicle sales, particularly those of cars, continued to skid in August at most manufacturers due to rising interest rates, soaring fuel prices and higher taxes.
Sales at market leader Maruti Suzuki grew to 76,018 units in August, up just 1.2% on-month but 51.6% on-year on account of lower base sales were impacted due to labour issues in August 2012.
Hyundai, which trails Maruti in sales, saw a marginal growth of 0.19% on-year.
“The overall market is suppressed due to various macroeconomic factors. The frequent and steep increases in fuel prices continue to impact the already low market sentiment. We expect the challenge to continue in coming months as well until there is a significant change in macroeconomic policies,” said Rakesh Srivastava, senior vice-president, sales and marketing, Hyundai Motor India.
Passenger vehicle sales at Mahindra & Mahindra (M&M) dipped 28% due to higher taxes on sports utility vehicles and rise in fuel prices, while those at Tata Motors declined 48% and Toyota Kirloskar Motor (TKM) skidded 14% on-year. Ford India’s sales grew a mere 2% on-year despite the launch of the EcoSport.
Desperate, the industry is started looking at the government for help.
“The auto industry, which is currently going through one of its most challenging phases, is in desperate need of some short-term fiscal stimulus. Immediate action by the government is needed so as not to lose out on the upcoming festive season,” said Pravin Shah, CEO of M&M’s automotive division.
Agreed Sandeep Singh, deputy MD and COO, marketing and commercial, at TKM: “The market is still sluggish.
However, we hope to see the market improve with good monsoons and the festive season.”
Only Honda Cars India bucked the downtrend with 63% jump on the back of strong sales of its newly launched Amaze.
In the two-wheeler space, sales at the biggest two-wheeler manufacturers were up: Hero MotoCorp sales grew 4% on-year in August to 4,59,996 units; overall sales at Honda Motorcycle and Scooter India grew 39% on-year. But motorcycle sales at Bajaj Auto declined 8% on-year.