The year started with a bang but now has turned to whimper for the auto industry. Booming sales in the first quarter had given a promising outlook to the car makers in India. Mercees had managed to achieve more than its half of its annual target within first six months of the current calendar year. However, the scenario has drastically changed since past few months.
The Reserve Bank of India has revised its repo rate for the third time in the year and has increased its CRR to check inflation. The retail banking sector has been badly hit and has increased its interest rates for car loans and home loans. On the other hand, the auto makers are finding it tough to keep the manufacturing costs under control due to escalating raw material prices of steel, rubber, plastic, etc. Several car makers have already hiked their car prices and has witnessed a slump in the domestic sales.
July 2008 sales figures do not tell a better story either and reflects a mixed bag in domestic sales. Maruti witnessed a rise of 0.1 percent in its sales to 52,911 units as compared to 52,83 units in the same month last year. Hyundai also market a marginal growth of 0.4 percent to 15,033 units in July 2008 against 15006 units in July 2007. Tata Motors, however, reported a decline of 14 percent in its sales. General Motors witnessed a sparkle in its sales figure which reported a growth of 25 percent due to its ongoing scheme on Chevrolet Spark. Similarly, Skoda India reported 83 percent growth to 1550 units in July 2008 against 845 units in the same month last year. However, Honda Siel Cars India Ltd. saw its sales dip by 4.27 percent to 4339 units against 4533 units last year.
