The Indian auto industry's hopes of cashing in on festive season were dashed by severe liquidity crunch and high financing costs, with total vehicle sales in domestic market dipping by 14.42 per cent in October.
The industry, which witnessed a total vehicle sales of 8,65,404 units as against 10,11,221 units in October last year, was dragged down by poor passenger cars, motorcycles and commercial vehicles sales.
According to Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales went to reversed gear in October with a 6.59 per cent fall at 98,900 units as against 1,05,877 units in the same month last year
Motorcycles sales were at 5,38,353 units as against 6,57,874 units last year, down by 18.17 per cent, while that of commercial vehicles were down by 35.95 per cent to 28,027 units during the month from 43,756 units in the year-ago period.
"Whatever steps that were taken up by the government and RBI to ease liquidity crunch are not sufficient. They have been used up to correct existing problems in the system and it had not trickled down to the auto industry," SIAM director general Dilip Chenoy said.
He said October sales were so bad that it had pulled down the cumulative sales growth of the fiscal to 5.64 per cent (in April-October) from 10.07 per cent (in April-September period).
"Financing is still a big issue for the auto industry and we are keeping a watch till the end of this month to forecast what growth the industry can achieve this fiscal," Chenoy said, adding for the passenger cars sustaining even a single digit growth would be a challenge.
Earlier this year, SIAM had projected an overall sales growth of 12-15 per cent, which was revised to 8-10 per cent in September.
During October, sales of car market leader Maruti Suzuki India declined by 6.42 per cent to 52,153 units, compared with 55,731 units in the same month last year, SIAM said.
Hyundai Motor India Ltd on the other hand, riding on the back of its new hatchback 'i10', managed a growth of 9.91 per cent at 20,001 units, against 18,197 units a year ago.
Tata Motors were also able to marginally push the sales northward at 14,100 units, while the same stood at 14,006 units in October last year. General Motors sales also increased by 25.33 per cent to 5,477 units from 4,370 units in the year-ago period.
Defying odds, domestic car sales growth had returned to positive path at 2.84 per cent in September after previous two consecutive months of downhill drive.
Festival season purchases, which usually boost bikes sales, failed to bring cheers to manufacturers this year with sales falling by 18.17 per cent in October at 5,38,353 units versus 6,57,874 units in the corresponding month last year.
Market leader Hero Honda registered a 5.31 per cent decline in bike sales at 3,28,788 units in October, compared with 3,47,216 units in the year-ago period.
Rival Bajaj Auto's sales plummeted by 50.13 per cent at 1,02,242 units as against 2,05,004 units in the corresponding month last year, SIAM said.
Chennai-based TVS Motor Co too registered a fall of 24.47 per cent in sales at 44,257 units as against 58,594 units.
However, it was a different story in the scooters segment with sales during the month growing by 4.40 per cent at 1,03,101 units, against 98,752 units a year ago, SIAM said.
Honda Motorcycle & Scooter India had a growth of 12.95 per cent at 59,988 units as against 53,109 units in the same month last year.
Premium car makers face heat of slump
Just when premium segment car makers thought they were insulated from the slump in the automobile market, unlike mass market car-makers, data from the Society of Indian Automobile Manufacturers (SIAM) seem to shake them out of their comfort-zone.
In October, sales of high-end cars (priced between Rs 8.02 lakh and Rs 1.24 crore) fell by 30.51 per cent to 2,859 units compared to 4,114 units in the corresponding month of last year.
The hardest hit was the luxury segment (price ranging between Rs 73.6 lakh and Rs 1.24 crore), which was considered to be the most insulated from the current credit crisis, declining by 61.19 per cent to 26 units from 67 units in the same month last year.
In this category, German carmaker Mercedes-Benz's sales (the S-class model) in Indian market plunged by over six fold in October to only seven units from 44 units in the year-ago period, SIAM said, adding BMW India's sales (7-Series cars) in the segment also declined by 17.39 per cent at 19 units compared to 23 units in the same month last year.
SIAM pointed out that sales of executive segment cars in October also plummeted by 34.29 per cent to 2,313 units from 3,520 units in the corresponding month of 2007.
Honda Siel Cars India (HSCI) selling 'Civic' registered a fall of over three fold at 422 units compared to 1,421 units, while General Motors India posted nearly three fold decline in 'Chevrolet Optra' sales at 153 units during the month as against 436 units in the year-ago period.
