Amid a sharp 650 points gain in the Sensex, automobile index surged by 2.5 per cent on Friday but on the other hand domestic car sales figures for the month of April slid by 10.15 per cent. Posting the biggest monthly decline in a year, car sales fell as gloomy macro-economic conditions continued to plague demand despite cut on excise duties on automobiles.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in April stood at to 135,433 units in April as compared to 150,737 units in the year-ago month."This is the biggest decline since May 2013, when car sales dropped by 11.7 per cent," SIAM Deputy Director General Sugato Sen said. Explaining the reasons for the continued sales dip despite reduction in excise duty in the Budget, he said, "What is happening is that we are unable to recover from the negative sentiment. We need a trigger to change the sentiment."
Sen further added that the change would be possible only after a new government comes to power and announces measures to kick start the economic growth during the full Budget. "The current rate of 4-5 per cent growth is not enough. For a healthy growth of the automotive sector, we need the economy to grow at over 7 per cent," Sen said, adding the forecast of a deficient monsoon is also a concern.
Factors like high interest rates, fuel prices and inflation are still affecting demand. When asked why the reduction in excise duties hasn't resulted in demand surge, he said: "Today, even after the cut, the cost of ownership is extremely high. The small car customers are the most vulnerable under the current circumstances."Sen, however, said the only positive was that footfalls at dealerships have increased although those have not been converted into sales. Charting out the auto industry's expectations from the new government, he said roll out of GST, implementation of fleet modernisation programme and greater emphasis on higher economic growth must be top on the agenda.
According to the SIAM data, the country's largest carmaker Maruti Suzuki India witnessed 14 per cent decline in its domestic sales at 65,786 units in April as against 76,509 units in the same month last year. Tata Motor's car sales also slipped by 36.61 per cent to 5,653 units.However, rival Hyundai Motor India ltd posted 8.48 per cent increase at 35,110 units as compared to 32,364 units in April last year. Honda Cars India saw its car sales jump by 30.21 per cent to 10,977 units during the month, up from 8,430 units in April last year.
Motorcycle market leader Hero MotoCorp saw its bike sales grow by 14.57 per cent to 4,95,701 units in April this year. Rival Bajaj Auto, however, saw its sales dip by 16.49 per cent at 1,66,874 during the month.Honda Motorcycle and Scooter India (HMSI) posted a growth of 13.71 per cent at 1,31,378 units in April this year. The scooters segment continued its robust growth at 3,29,680 units, up 26.08 per cent from 2,61,475 units in April last year, SIAM said.
Market leader HMSI had a growth of 27.53 per cent in scooter sales at 1,70,600 units, while Hero MotoCorp's grew by 13.10 at 62,855 units. Chennai-based TVS Motor Co saw its scooter sales grow by 55.17 per cent to 44,472 units during the month.
According to SIAM, sales of commercial vehicles (CVs) were down by 24 per cent to 43,080 units in April. Sen said with the ban on mining being lifted, there could be some improvement in the CV segment in the coming months.