The Telegraph
Wednesday , February 12 , 2014
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Car woes deepen

New Delhi, Feb. 11: Car sales fell for the fourth straight month in January by 7.59 per cent to 1.60 lakh units compared with 1.73 lakh units in the same month last year, the Society of Indian Automobile Manufacturers (Siam) said on Tuesday.

Compounding the woes of the auto industry, the sales of heavy and medium commercial vehicles (CV) fell for the 23rd month in a row, declining 21 per cent to 49,987 units from 63,218 units in January 2013.

Sales of utility vehicles also declined 6.27 per cent to 45,941 units during the month from 49,015 units in the year-ago month, Siam said in its monthly report.

“The downward trend continues. There is no respite for the auto industry. We are having a huge hope from the government that in the vote-on-account budget, there will be some support for the auto industry,” Siam deputy director-general Sugato Sen said.

He said the situation now was worse than in 2008-09 when the government had provided relief to the industry with policy support.

“We are hoping that there will be a reduction in the excise duty. For the CV segment, we have been asking for a fleet modernisation scheme and the implementation of load management,” Sen said. He, however, did not specify the amount of excise duty cut the industry body was expecting.

According to Siam officials, the decline in car sales and commercial vehicles started in the second quarter of fiscal 2012. High inflation, fuel prices and interest rates — which resulted in a high cost of ownership — continue to affect consumer sentiment.

Experts believe the trend is likely to continue till after the general elections.