Thursday, October 13, 2011
By Pranjal Gera
Decline in car sales reported; thanks to inflation: SIAM
In India the automobile manufacturers never appreciate the hike in prices. In the month of April 2011, some Indian auto manufacturers were not able to meet up consumer demand as they were unable to manufacture required number of cars, which hampered the sales numbers. However, the car buyers are now extremely cautious about what they are spending; and the credit goes to the rising rate of interest.
As per the report of Society of Indian Automobile Manufacturers (SIAM), the sales in the entire auto industry including all the segments fell in July 2011 by 16 percent in comparison to 10 percent in August last year. Last month’s sales downfall was particularly very low as 1.4 percent was registered. The figures are unclear for the month of November, due to festive occasion.
SIAM, the chief industry body which stands for thirty eight leading automobile and automobile engine manufacturers in India. The organization works intimately in formulation of rules, regulations and guidelines in relation to automotive industry.
According to SIAM the sales growth will be slow down for the financial year that ends in April to 2 percent to 4 percent; that is about one-tenth that was in 2010.
The soaring consumer commodity prices that are rising at close to 10 percent is a major reason of decline in sales. The common man of today is finding it difficult to earn his bread, pay utility bills. If decided to spend his earnings buying a car than the household priorities will go for a toss.
But still some automobile manufactures like Tata Motors will smile, thanks to the commercial vehicle wing of the company which generates 70 percent of the profit from the sales of tractors and trucks. These vehicles are expected to do better than the passenger cars. The truck sale is projected to move up by 13 percent to 15 percent this year, as predicted by SIAM.
Among the ones which are expected to experience downfall is the largest passenger car maker; Maruti Suzuki India. Since the month of August 2011 the share price of the company is low by 11.7 percent, according to a leading brokerage.