Automakers sold 118,142 cars in August, down 18.6 percent from a year ago, according to data released on Monday by the Society of Indian Automobile Manufacturers (SIAM). Weak demand was compounded by a factory shutdown at market leader Maruti Suzuki that slashed its sales by 41 percent.
Sales of motorcycles fell 8.5 percent to 766,127 vehicles. Truck and bus sales stood at 66,767 vehicles, up 3.9 percent.
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Domestic car sales down 19 pc, bikes' dip by 8 pc in Aug
(PTI) Car sales in India declined by 18.56 per cent in August this year, the biggest drop in 10 months, prompting industry body SIAM to seek cut in excise duty from the government.
With exports also posting the highest decline in more than 11 years, falling 26.83 per cent during the month, Society of Indian Automobile Manufacturers (SIAM) also sought a stimulus package similar to the one given during the 2008-09 downturn, stating the industry is "now entering a desperate situation".
The overall vehicle sales in the country also registered a drop of 3.9 per cent to 13,54,436 units in August this year, the biggest decline in more than three and half years.
According to the latest SIAM figures, domestic cars sales in August stood at 1,18,142 units compared to 1,45,066 units in the same month last year, down 18.56 per cent. The rate of decline is the highest since October 2011, when sales declined by 23.74 per cent to 1,39,095 units.
"This is the time when wholesale numbers should be picking up as dealers stock-up to meet festive season demand, but this has not happened. We are entering a desperate situation. We need help from the government," SIAM Senior Director Sugato Sen told reporters here.
He said the excise duty on automobiles, which was increased in this year's Budget, needs to be reduced, particularly for the commercial vehicles segment.
"The stimulus package, which was provided during the 2008-09 downturn, needs to be provided. If something is not done by the government, we are going to suffer," Sen added.
Car exports during the month stood at 36,104 units, down 26.83 per cent. The previous lowest decline in exports was recorded in March 2001, when overseas shipments dropped by 48.37 per cent to just 2,221 units.
"The decline in exports has also affected the overall production of the companies here in India," he said.
In this year's Budget, excise duty on small cars was hiked to 12 per cent from 10 per cent. For petrol cars with engines under 1,200 cc and diesel cars with engine capacity under 1,500 cc, but the length exceeding four metres were increased to 24 per cent from 22 per cent and a fixed duty of Rs 15,000.
Petrol and diesel driven vehicles having length exceeding four metres and engine capacity of over 1,200 cc and 1,500 cc respectively were charged with an ad valorem duty of 27 per cent, instead of the earlier 22 per cent and a fixed duty of Rs 15,000.
During the 2008-09 downturn, the government had provided a stimulus package by reducing CENVAT by 4 per cent. For the commercial vehicles segment, public sector banks were allowed to provide line of credit to NBFCs on new purchases and one-time assistance under Jawaharlal Nehru National Urban Renewal Mission to purchase buses for urban transportation.
The month-long lockout at Maruti Suzuki's Manesar plant from July 21 impacted the industry's numbers last month.
Sen, however, said this was not the sole reason for the decline in car sales as the overall market is down due to high interest rates and fuel prices along with inflationary pressure.
"The drop of nearly 19 per cent for the industry is too big for a single company to make up," he said.
In the passenger car segment, market leader Maruti Suzuki's sales fell by 49.99 per cent to 31,653 units. Rival Hyundai Motor India's sales, however, increased by 6.58 per cent to 28,192 units. Homegrown auto major Tata Motors' car sales were up by 31.23 per cent at 17,727 units.
According to the SIAM figures, motorcycle sales in last month fell by 8.46 per cent to 7,66,127 units from 8,36,887 units in the same month previous year. This is the highest decline in more than three and half years. The sales had fallen by 5.81 per cent in January 2009.
Total two-wheeler sales in August 2012 decreased by 4.50 per cent to 10,57,925 units from 11,07,782 units in the same period of previous year.
"The two-wheeler industry is also suffering. The last decline happened in January 2009 when sales dropped by 3.95 per cent," Sen said, adding factors like high petrol price and interest rates were keeping customers away.
In the motorcycle segment, market leader Hero MotoCorp posted 15.34 per cent fall in sales to 3,88,903 units in August. Rival Bajaj Auto's sales went down by 13.89 per cent to 1,95,093 units.
However, Honda Motorcycle & Scooter India (HMSI) posted a 77.83 per cent increase in sales to 96,876 units, while TVS Motor moved 39,413 units, 29.85 per cent less than the same month of the previous year.
The scooter segment's overall sales grew by 9.95 per cent to 2,33,180 units from 2,12,077 units.
HMSI's scooter sales grew by 14.74 per cent to 1,12,288 units in August, while Hero MotoCorp sold 42,836 units, up 51.63 per cent. TVS Motor's sales saw decline of 23.08 per cent to 37,462 units.
Total sales of commercial vehicles in August rose by 3.92 per cent to 66,767 units from 64,248 units in the year-ago period, SIAM said.
Medium and Heavy Commercial Vehicle sales declined 8.91 per cent to 25,003 units during the month against 27,448 units in August last year.
According to SIAM, light commercial vehicle sales grew 13.49 per cent to 41,764 units in August 2012 from 36,800 units in August 2011.
In the three-wheeler category, sales went down marginally to 45,386 units from 45,468 units in the same month last year.
Car sales may miss growth forecast,will revise after Sept: SIAM
With domestic car sales posting the biggest drop in 10 months in August by 18.56 per cent, industry body SIAM today said its forecast of registering a growth of 9-11 per cent in this fiscal is unlikely to be met.
While the August car sales stood at 1,18,142 units in August 2012 compared to 1,45,066 units in the same month in 2011, for the April-August period this fiscal it stood at 7,52,440 units as against 7,45,991 units in the same period last year, up 0.86 per cent.
"If the declining trend continues, if the September sales are also in the negative, then we won't meet the growth target," Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen told reporters here.
In July, SIAM had lowered car sales growth forecast to 9-11 per cent for this fiscal due to weak macro-economic conditions, from an earlier projection of 10-12 per cent.
For the overall passenger vehicles segment, the industry body had revised upward the growth forecast at 11-13 per cent for the fiscal as against 10-12 per cent announced in April this year.
Sen said this is also unlikely to be met.
"That's something we have to see. The growth of cumulative passenger vehicle sales in the April-August period this fiscal is at 7.42 per cent," Sen said.
According to the latest SIAM data, passenger vehicle sales in India stood at 10,49,961 units in the April-August period this fiscal as against 9,77,393 units in the year-ago period.
Considering the current trend, this festive season could be one of the worst, Sen said.
He, however, said SIAM would revise the growth projection only after seeing the September sales.
He said apart from the overall weak market sentiments and the conditions of the economy, vehicles sales have also been impacted due to government putting on hold purchase of new vehicles for all its departments since June.
As per a notification issued on May 31, the government had asked the departments not to buy new vehicles till further notice, even for replacing condemned vehicles.
Sen was, however, optimistic that the government could work out a way to support the automobile industry to boost the overall sales.
"NMCC (National Manufacturing Competitiveness Council) has got in touch with us and we had a discussion on how to support the automobile industry. They had also called a meeting of Chief Secretaries of states," he said.
The NMCC is also in consultation with different industry chambers like CII and FICCI, he added.