The sales figure of the passenger cars reached an extreme high of 30 percent since the past few years; however, the tall figure came down crashing this year round. Particularly this year, the sales of passenger cars were anticipated to come down as loan interest increased, vehicle prices swelled and fuel prices were far from what could be afforded. Therefore, after the enthralling performance by passenger cars till last year, the trend has been adversely affected.
SIAM (Society of Indian Auto Manufacturers) in its sales prediction, for the month of July, claimed a decline in total sales for the year 2011-2012 (April-March) to around 11-13 percent from 12-15 percent. However, the sales of commercial vehicles and two-wheelers have not been affected similarly. These segments have performed quite decently and have ensured a consistent sales growth at a uniform pace. It is the passenger car segment that has been severely hit.
Furthermore, SIAM cut its passenger car sales forecast drastically to 10-12 percent from 16-18 percent. According to experts of the Indian auto industry, the sales performance so far has created a trend wherein the passenger car sales are barely single digit numbers.
Maruti Suzuki, India’s leading passenger car maker, witnessed its sales in August to fall by a staggering 13 percent, compared to previous year. The overall sales performance for the time span of April to August has come down by 8 percent this year. Another prominent auto maker, Tata Motors sales in August also declined, to 3 percent year-by-year, despite positive growth in its commercial vehicle segment. Moreover, the passenger vehicle sales figure has come down by 34 percent in comparison to the previous year. Hyundai Motor experienced decline in its domestic sales by 7 percent, accounting to around 26,677 units. Even as the month of August marks the beginning of the festive season, there is no celebration in the automobile camp.
Vineet Hetamasaria, Vice President (Research), was quoted as saying, "The sentiments are not improving at all. Over the next two months of the festive season expect sales to decline year-on-year only. Footfalls are not expected to go up.” He also added that “The expected full year sales growth will only likely be around 6-7%.”
R. C. Bhargava, Chairman of Maruti Suzuki, has conveyed that the concerns are getting quite deep. He said that, “We are all hoping that with the coming festival season, there will be a pick up in demand and things will become better. But overall for the year, I would be surprised if we can get to more than 8% or so of growth for the industry as a whole.”
Apart from the menace of soaring fuel prices and increasing interest rates on loans, the inflation is another demotivating factor. However, analysts hope that with launch of new vehicles, such as Honda’s small car Brio, Hyundai’s Eon and the diesel versions of Toyota Etios and Liva in the coming time, there might be slight improvement in sales of the passenger car vehicles. Auto makers are also hoping for the best and speculating better sales figures in future, especially in the coming festive season.
