Automotive Industry continues to perform poorly in June

Owing to the lack of interest and favour from the buyers, the sluggishness in car sales continued in June as well. The major reason behind the fallout is the blend of high interest rates, petrol prices and floating taxation decisions over diesel cars. A fall of 22 per cent was reported by the third largest car manufacturing company, Tata Motors with a sales volume of 17,244 units. On contrast, the sales of Nano surged 3 per cent and amounted to 5,605 units, while those of Indica range went down by 35 per cent with 5,332 units. Indigo range was the worst hit as it sold only 2,658 units and marked a dip of 46 per cent. On the other hand, sentiments were in favour of Utility Vehicles (UV) like Sumo, Safari, Aria and Venture, which sold 3,649 models to mark a growth of 5 per cent.

Market leader, Maruti Suzuki and Hyundai will possibly release their sales figures on July 2, 2012. Car manufactures with an extensive diesel line-up are not affected much due to the advantage of more than Rs. 30 per litre that diesel holds over petrol. Mahindra & Mahindra (M&M) reported a 23 per cent growth in sales of its UVs like Bolero, Scorpio and XUV500, along with sedan Verito with a sales figure of 19,792 units.

Chief Executive Officer, Automotive Division, M&M, Pravin Shah, said, “We are happy to have achieved growth, given the pressures and uncertainties that the auto industry is currently facing.” He further added, “Our opinion in the current industry situation is to not have any major changes in policies, including fuel prices, to create an overall positive sentiment.”

He expects the demand for the UVs to continue in the FY as well. Riding on the back of Etios, Innova and Fortuner, Toyota Kirloskar Motors (TKM) reported a northbound surge of 22 per cent with a sales volume of 14,700 units.

Deputy Managing Director, Marketing, TKM, Sandeep Singh, quoted, “We are relieved by the recent pull-back of the fuel price. However, we don’t see market sentiment improving considerably with other factors at play.”

Another company hit by the sluggish market, TVS Motors, which manufactures two- and three-wheelers at its Chennai plant marked a fall of 7.5 per cent in June which amounted to 1.68 lac units. Speaking of the Commercial Vehicle (CV) industry, with 41,026 units sold, Tata Motors went up by 4 per cent. The demand for light CVs spearheaded the 22 per cent growth of the company with sales of 28,363 units. However, June 2012 witnessed a 21 per cent dip in the sale of medium and heavy CVs whose sales figures stood at 12,663 units. In the same period, Eicher Trucks and Buses reported a growth of 9 per cent with 4,064 units, majority being buses, which accounted for 1,114 units. Considering the present scenario, the manufacturers need to come up with better and efficient models to shift the sentiments back in favour of the auto industry.