In slow lane
New Delhi, Sept. 10: Car sales fell 19 per cent in August — the biggest decline in 10 months — as high fuel prices and increased loan rates along with a slowing economy kept potential buyers away.
“Now we are entering a desperate zone,” said Sugato Sen, senior director of the Society of Indian Automobile Manufacturers (Siam).
“If the negative trends continue in September, we will have to revise our targets downwards,” Sen said.
Car sales stood at 118,142 cars in August compared with 145,066 a year earlier — the sharpest decline since a 24-per-cent drop last October.
Siam has cut its growth estimate for the fiscal to 9-11 per cent from its previous projection of 10-12 per cent.
The auto industry lobby also suggested that the government should consider rolling back excise duties to provide “stimulus” to the sector.
Excise duty on small cars was raised 2 per cent to 12 per cent in the budget. For cars more than four-metre long, the levy went up 5 per cent to 27 per cent (with ad valorem rate).
The month-long lockout at Maruti Suzuki’s Manesar plant — that cost the company Rs 1,300 crore in lost output and slashed its August sales by 41 per cent — also affected numbers. Sen, however, said, “Even if Maruti had full production, sales would have been down.”
The fall in August car sales is worrying for the industry as it indicates lower build-up of stocks by dealers on expectations of weak demand.
“We thought with the onset of the festive season, the dealers will start ordering and building inventory, but we are facing a totally different situation,” said Sen.