Car Sales dip by 7-8% in April 2013

Last fiscal was not good for the Indian auto industry, and the trend in the passenger vehicle industry at the start of new fiscal is no different. The new financial year started from where it left last fiscal, when the Indian car market witnessed sales falling at 6.7 per cent, the first time negative growth in 12 years. Moreover, an increase in excise duty on sports utility vehicles, which was effective from April, also affected the growth of the fastest-growing utility vehicle.

The overall passenger vehicle market, which includes UVs and Passenger Cars have posted a negative growth of 7-8 per cent with sales of about 2.02 lakh units and 9-10 per cent decline with 1.53 lakh units respectively.  Maruti Suzuki India sales for April 2013 were stable, other manufacturers like Hyundai India, Tata Motors, and Toyota Kirloskar recorded a decline of 7 per cent, 49 per cent and 37 per cent respectively. When ET spoke to a senior industry executive about the present market, he said that due to festivals of Navratri, Ugadi, Vishnu, Bihu or Gudi Padwa in various parts of the country, the decline in sales were not very high, else it would have been even steeper. The automotive industry has taken various measures to overcome this crisis. The sales are continuously falling despite launching of various new cars, facelifts.

Adding to the woes, the utility vehicle segment that drove the overall market with over 50 per cent hike last fiscal, has also registered a slow growth in lower single digits after the excise duty increase in the budget. Mahindra & Mahindra posted a decline of 2-3 per cent in UV sales, excluding Quanto. Maruti's UV sales in India fell by 5 per cent in April 2013 with sales of 5,318 units, and TKM recorded a negative growth of 30-40% in UV sales (Fortuner and Innova). Pravin Shah, chief executive, automotive division at Mahindra & Mahindra, said, "We are extremely disappointed that the additional 3% excise duty on SUVs has not been reversed in the Finance Bill. If it had been reversed, it would have brought some cheer and momentum for SUV makers and provided them with a level playing field."

"We remain cautiously optimistic of the current situation and do hope that with a likely cut in interest, the auto industry will look up," Shah added. Sandeep Singh, deputy MD & COO, marketing and commercial at Toyota Kirloskar, said, "The market continues to be sluggish and is expected to take some time to revive. We have taken measures to reduce inventory, both at our end as well as at the dealers' end."

Specific models like Renault Duster, Maruti Suzuki Dzire and new Honda's compact sedan Amaze recorded an impressive start of new financial year. Jnaneswar Sen, senior VP - marketing & sales at Honda Cars India, said, "Amaze has received tremendous response from customers despite the slowdown in the industry. We are confident that Amaze will drive our growth in this fiscal."

Source : ET