Sales of small cars slowest in a decade during April

Budget-related price hikes, high petrol prices and high interest rates savaged small car sales in April, leading to a 0.68% growth, the slowest in a decade.

Demand will continue to remain under pressure for the first quarter of the new fiscal, experts said.

According to the Society of Indian Automobile Manufacturers (Siam) data, small cars refer to models like the Maruti Alto, Wagon R and the Tata Nano.

Siam data show that in April, the passenger car segment grew just 3.40% on-year, on sales of 1.68 lakh units (1.62 lakh units in April 2011), while the overall passenger vehicle grew by 9.30%.

“The growth in April this year was sober and the slowest for April in the last ten years. The price hike that was done after the excise duty was raised in the Budget and high interest rates have affected consumers’ sentiment,” said Vishnu Mathur, Siam director-general.

Mathur’s colleague Sugato Sen, senior director of Siam, said the small car segment, though affected most by the high inflation and high interest rates, is expected “to revive going ahead”.

Agreed Yaresh Kothari, an analyst at Angel Broking. “The small car segment is dominated by petrol variants, which are under pressure currently due to high fuel prices. Despite high discounts, the sales have not improved. We expect the sales to improve in the second half of the year.”

In the commercial vehicle (CV) segment, medium and heavy commercial vehicles were most impacted as they witnessed a de-growth of 11.6%, while the overall CV segment grew 4.37% on-year in April. The three-wheeler segment, too, suffered de-growth of 5.35% in April.

Market leader Maruti Suzuki’s sales rose 4%, while Tata Motors’s fell 3%. Hyundai’s sales were up 11%. Continued traction for diesel models saw the utility vehicle (UV) sub-segment posting a 47% growth on sales of 29,008 units, led by a 33% growth in Mahindra’s sales.

However, two-wheeler sales were up 11% in April, up from 8% in March, led by Hero MotoCorp’s highest-ever monthly sales of 5.51 lakh units, up 7%.

Among scooters, motorcycles and mopeds, scooters grew the highest at 30.3% on sales of 2.27 lakh units, up from 1.74 lakh units sold in April 2011.