Declining car sales because of increasing petrol prices and the shortage of diesel models in lower segments has left the car companies with an only option of offering goodies and freebies on their petrol variants to lure buyers.
Heading the bandwagon, country’s best selling car, Maruti Suzuki Altosaw a major dip in its sales during May 2012 as the figures reduced by 18 per cent. However, the cumulative sales of company during the same period dipped by 5.94 percent and amounted to 72,309 units when compared with the corresponding period last year. In order to make the situation favourable, the car maker comes up with discounts of up to Rs. 50,000 on Alto and the wagon R, which were considered as bestsellers of company.
Reports by the Society of Indian Automobile Manufacturers (SIAM) revealed that the cumulative sales of petrol cars have witnessed a downfall of 14 per cent in fiscal 2012.
Joining the league, country’s second largest car maker, Hyundai is also offering enticing offers like “petrol price lock assurance” scheme under which the company is offering a discount of up to Rs. 52,000 on its i10 and Santro models. Moving with the flow, South Asia’s largest automotive company, Tata motors has brought down the price of Nano by Rs. 40,000, while made a cut-off of Rs. 60,000 on Indica Vista.
According to SIAM, although the car sales in India surged 2.8 per cent, it was much lower than the expectations made by industry. Hyundai motor, with a total sales volume of 31,939 units grew merely by 3.03 per cent, while Tata motors with sales of 17,371 units expanded by 6.70 per cent. Sales of both the car makers were mainly driven by diesel vehicles.
In an effort to boost sales, the Japanese auto manufacturer Nissan is selling its Micra at a low EMI of Rs. 3,999 while Volkswagen is providing loans for its Polo at a low Interest rate of 5.99 percent.
The declining sales and increasing inventory of unsold cars have forced several car manufacturers to cut down their production. In May 2012, auto industry estimates that the number of unsold petrol vehicles stood at 2 lacs, almost two-fold than that of diesel models which were slightly more than 1 lac.
A rating agency ICRA mentioned in a recent report, “Our interaction with dealers indicate that slowdown in customer enquiry flows is not yet a cause of concern. However, the rate of conversion of sales enquiries into vehicle sales continues to taper off in metros, tier-1 and tier-2 cities”.
Subrata Ray, Senior Group Vice-President and Head, Corporate Sector Ratings, ICRA, stated, “The mini and micro segments have been very badly hit because of the macroeconomic environment affecting the overall sentiment. Another reason is the significant increase in petrol prices and the lack of major diesel variants in that segment.”
