Latest Car News in India

Monday, July 04, 2011

By Pranjal Gera

Car sales in June suffering Inflation, increased rates & Fuel costs

The Indian car market grown exceptionally in past two years and now food and fuel prices on fire is having a direct impact on the automobile sector. Several car buyers even postponed their car purchases.

Two of the leading three carmakers reported a fall in their sales figures so; car sales in the month of June have grown only 3-4% which is lowest in two years.

Third biggest car maker Tata Motors sales slumped 21%, while Maruti Suzuki reported a 3.8% decline year-on- year, its sedan plant at Manesar had to suffer due to strike and so it affected the sales of sedans Maruti SX4 and Swift Dzire but, sales of its other models such as Maruti Alto, Maruti Zen Estilo, Maruti A-star, Maruti Wagon R and Maruti Ritz slowed too.

Hyundai motors also reports consumers postponing purchase.

As stated by a Maruti Suzuki executive, it will be a challenge to rejuvenate sales in the coming months and they are looking forward to the festive months. Usually, the monsoon months are slow for car business and festive months like September and October renew customer interest as there is introduction of fresh car models in the Auto market.

The world’s cheapest car, Tata Nano’s sales dropped by 29%, as reported by Tata Motors. The company’s other cars Tata Indica and Tata Indigo sedan sales slumped too in june.

In recent times, China and India has been two fast-paced developing auto markets with a sale rising up to 26% and 30 % in previous years. The sales growth started to decline in April of this year and then by the month of June the sales growth rose by just 2.77%.

Auto Experts are relating the sales to the India’s Index of Industrial Production (IIP) and expects sales to revive only after growth in IIP numbers. Some analysts feel that the reasons for the decline in sales growth of automobiles are due to increase in Vehicles prices in April, rise in fuel prices and in interest rates. They further add that models at affordable prices will revive interest in car buyers and can improve sales growth.

New launches like New Hyundai Verna, Toyota Etios and Volkswagen Vento has generated interests in the Indian auto market. Hyundai Verna within 50 days of its debut got a booking of over 21,000 units. Successful Volkswagen Vento sedan and Volkswagen polo hatchback doubled the sales for Volkswagen.

Toyota Kirloskar reported impressive gains by success of its basic Sedan Etios and at a very attractive price of Rs. 4 lakh Toyota Etios Liva, is an added cherry on the cake for the company’s sales growth.

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