First drop in car sales since January; gloomy market at fault

Monday 10 September 2012, 12:11 PM by

The Indian car market witnessed drop in sales for the first time in the last ten months in August along with the motorcycle market, which too dipped for the first time since January 2009. The burgeoning auto finance rates combined with gloomy market sentiments are considered as the prime reasons for the drop in sales and demands of automotives in the country. Additionally, the dallying economic growth has further added to the miseries of the auto makers operating in the Indian market.

According to the apex industrial body, Society of Indian Automobile Manufacturers (SIAM), some 118,142 cars were sold in the Indian car market during last August, witnessing a 18.6 per cent drop as compared to the same period last year. The sluggish sales and dwindling demand have also been credited to the month long lockout of Maruti Suzuki's Manesar facility, which resulted in losses amounting to millions for the company and also led to reduction in its vehicle sales by 41 per cent.

Coming to the Indian motorcycle market, the sales dropped by 8.5 percent and stood at 766,127 vehicles while the truck and bus sales picked up 3.9 per cent sales with the total sales standing at 66,767 vehicles.

The petrol price hike has been deferred by the Oil Ministry and the car makers will be keeping their fingers crossed during the festive season, which is just round the corner. The Indian festive season is considered important as it contributes to a significant fraction of the annual vehicle sales of the car companies operating in the country.