January sales have already set alarm bells ringing for car makers. The bigger concern is the annual growth rate may turn negative for the first time since 2002 if sales in the remaining two months to this fiscal fail to add up.
There is a troika furiously at work here — a high interest rate regime, the inflationary strain and a lacklustre economy are already taking their toll, with most first-time buyers putting off their purchases. So, it’s self-evident that February and March will be the months to watch out for if annual car sales have to stay in the positive zone.
Sample this. According to the statistics from the Society of Indian Automobile Manufacturers (SIAM), the representative body of auto makers, domestic car sales grew a meagre 7.2% in January to close the month at 196,013 units (182,852 units), which is just not enough to undo a record fall in earlier months. In April-January, sales trended down almost 2% at 1,574,847 units (1,593,850 units).
A comparison with annual figures for 2010-11 makes it a little clearer. In the previous fiscal, car sales logged a decent 30%, only to report their first monthly fall in three years last July. January has become the third consecutive month of a sales growth this fiscal.
Referring to SIAM’s own revised forecast of 0-2% growth rate in FY12, director general Vishnu Mathur said: “The car industry is too sensitive to interest rates and we don’t see interest rates coming down quickly. Unless sales grow in February-March at 10-12% — and this is unlikely — the industry will miss the sales projection.”
Leading brands too are feeling the heat. General Motors India produced less than half of its small car Spark this January at 1,553 units from 3,219 in the same month last year. Aveo sedan’s output turned sharply lower to just 70 units (355). Sales of the Spark were also less than half at 1,190 units (3,268) whereas the Aveo sold a mere 34 units (240).
For Hyundai Motor India, the story is more or less similar, which manufactured and sold less in some categories in January. The combined output of the i10, Getz and i20 cars tumbled to 28,954 (28,774). Only 216 units of the Accent were made against 2012 in January 2010. To make it worse, not a single unit of the Sonata luxury sedan was produced. Talking about sales, the combined number for the i10, Getz and i20 fell to just 16,812 units as against 22,467 a year ago while Accent sales slipped to 463 units (1,317).
Barring these models, production and domestic sales in each passenger car category registered an overall growth. The data showed that even three-wheelers are in the same league, which too are showing some weakness this fiscal. It’s the two-wheelers and commercial vehicles that are charting a different route, which are still in the positive territory.
The exports offered something to cheer, where every vehicle category stayed positive. The overall export numbers climbed 28.36% till January to 2,462,559 units from 1,918,450 in the year-ago period.
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