Passenger car sales in India declined by 25.71 per cent in February 2013 over the same period last year, the lowest in 12 years, indicating that the segment would not make the 0-1% growth forecast for the fiscal.
The commercial vehicle (CV) segment posted a decline of 1.51% (Apr-Feb) while the M&HCV (medium and heavy CV) segment declined by 22.79% (Apr-Feb) and by 34.72% in February 2013, mirroring prevailing economic conditions in the country. This, despite the Finance Minister’s move to lower excise duty on CV chassis from 14% to 13% as well as the announcement of 10,000 new buses under Jawaharlal Nehru Urban Renewal Mission programme.
According to the latest numbers released by Society of Indian Automobile Manufacturers (SIAM) overall sales in February fell by 5.45% over the same period last year. The total passenger vehicle segment saw a decline of 16.67% for the month over last year. However, cumulative production data has shown a growth of 2.18% (Apr-Feb) over last year. The industry produced 1,731,824 vehicles (Feb-13) as against 1,791,795 (Feb-12) registering a decline by 3.35%.
Reeling under dipping sales figures, the sector got no respite as the Union government increased excise duties on the Sports Utility Vehicle segment from 27 per cent to 30 per cent .
“Bad numbers are not due to high interest rates but because the market is in such bad shape”, RC Bhargava, Chairman of India’s largest car manufacturer Maruti Suzuki India Ltd told Express.
Adding to this, Arun Agarwal, Auto analyst with Kotak securities said that the segment had been ‘subdued’ due to weak demand sentiment. “Auto sales in February remained lacklustre as been the case over the past few months. The M&HCV segment remained the most impacted in the current slowdown”, he said.
Unsure on how things would unfold in the upcoming fiscal (FY-14), Bhargava said “sales would depend on the health of the economy”. In the two wheeler category, only scooters witnessed a 2.55% growth in February 2013 while motorcycles declined by 4.48%. Even exports saw decline of 1.66% (Apr-Feb) overall while passenger vehicles grew by 9.67% over the same period last year.