Car sales suffer biggest fall of decade, output dives too

Domestic car sales fell 24% this October, the biggest fall in over a decade, at 138,521 units compared with 181,704 units in the same month of 2010.

It was also the first month this fiscal when slowdown finally reached overall vehicle production and about 30,000 less vehicles (cars, bikes and trucks) were produced in factories across India at 15,94,780 units (compared with 16,24,086 units earlier).
The last time overall vehicle production took a hit was in January 2009, at the peak of global market meltdown, when it fell by almost 12%.

Rising fuel costs, expensive loans and a general slowdown in economic activity continued to hurt the market. Petrol prices have risen by about 25% since the beginning of 2011, taking up the operating costs of a petrol vehicle manifold.

Though sales of diesel passenger cars have risen dramatically owing to the widening gap between petrol and diesel prices (up to `30 per litre in some states), lack of diesel powertrain production capacities at companies such as Maruti Suzuki India is hurting further expansion of diesel vehicle production.

According to data by the Society of Indian Automobile Manufacturers (SIAM), passenger car production fell by almost over 60,000 units last month to 156,090 units (216,983 units).

Though Maruti accounted for a bulk of this production loss  — Maruti’s production was down to less than half at 50,487 units - on labour trouble, other biggies also curtailed output but due to rising inventories.

The worst affected were hatchbacks or the small cars, since production was down by about a third to 124,173 units (181,646 units). Sales of such cars fell 28% to 106,841 units (149,097 units).

Tata Nano sprung a surprise by increasing year-on-year domestic sales to 3,868 units (3,065 units), GM Spark fell to 1782 units (3,233 units) and combined sales of the Fiat Palio and Grande Punto fell to less than 500 units (1347 units).

Even the Ford Figo declined to 5,689 units (7,149 units). Arrival of the diesel Beat ensured combined Beat and Chevy UVA sales climbed to 5,383 units (3,328 units); VW Polo sold 3,340 units (2,344 units).

Slowdown finally also percolated to two-wheelers, with most bike makers reporting lower sales in the entry level segment up to 125 cc. Overall domestic sales in this category were down to 605,050 units (625,596 units). Except Hero MotoCorp, all other players sold lesser bikes than a year ago period. In the Executive Segment (between 125 and 250 cc), production was marginally less but domestic sales rose to 265,684 units (244,276 units).

Total bike sales were only marginally up at 879,883 units (874,146 units). In commercial vehicles, cumulative sales were up 18.53% at 61,800 units (52,138 units). ends.