Auto sales decline, hits component makers
Updated: Jun 12, 2013 12:33:56pm
New Delhi, Jun 12 (KNN) The domestic car sales in India slid for the seventh consecutive month in May by 12.26 per cent following weak economic queues, the decline starting to hit component manufacturers, especially those in the small segment.
The local industry associations fear auto makers and their parts suppliers who directly employ a million workers, including permanent, temporary and contractual ones will cut jobs.
Recently, even the bonus of all time high double-digit discounts and cask back schemes failed to attract the customers.
Even the original equipment manufacturers may follow the loss, if the demand for cars continues to be low.
With the manufacturers cutting down their production by 4.08 per cent last month, it is feared temporary and contractual employees working on the shop floor may be laid off if the slowdown continues through the next few months.
In May, car sales fell 12.26 per cent to 1, 43,216 units.
Last month, utility vehicle sales grew a mere 4.2 per cent to 42,330 units.
In 2012-13, utility vehicle sales rose 52 per cent. However in May, overall, passenger -car, vans and utility- vehicle sales dropped 8.9 per cent to 2, 01,437 units.
While sales of commercial vehicles declined 10.6 per cent to 55,458 units, motorcycle sales fell 0.7 per cent to 8,81,288 units.
A 13 per cent growth in scooter sales saved the blushes for the two-wheeler industry, which grew by 1.13 per cent during the month. That, however, was not enough for overall sales that declined 0.93 per cent during the period.
Motorcycle sales declined 0.72 per cent to 8,81,288 units from 8,87,646 units in year-ago month. Market leader Hero MotoCorp posted a decline of 2.11 per cent in its sales at 4,92,044 units. Rival Bajaj Auto, saw its bike sales grow 2.6 per cent at 2,12,129 units, while that of Honda Motorcycle and Scooter India (HMSI) was down 2.79 per cent to 85,866 units during the month.
The overall domestic sales during April-May 2013 declined by (-) 0.64 per cent over the same period last year.
In the truck and bus segment, sales dropped 11 per cent from a year earlier in May to 55,458 units.
The decline is because of lower industrial activity and a fall in freight rates, director general of the Society of Indian Automobile Manufacturers (SIAM), Vishnu Mathur said.
The light truck and bus segment posted a 7 per cent drop in sales in May—the first since March 2009.
During May, Maruti Suzuki India registered 8.25 per cent decline in domestic sales at 66,342 units. Rival Hyundai Motor India posted a marginal increase of 0.35 per cent at 32,052 units, while Tata Motors saw its sales dip by 48.60 per cent to 8,927 units.
“This is the longest stretch of consecutive declines in car sales. Commercial vehicle sales have fallen for the 15th consecutive month. During the downturn of 2008-09, the stimulus package announced by the government had helped revive the industry. With the excise duty raised in the Budget this year, sales of utility vehicles, which had recorded strong growth last financial year, have also slowed,” Mathur said.
“The decline in sales is across segments. The drop in motorcycle sales is particularly of concern, as it shows even demand from rural areas has slowed. With manufacturers shutting plants to control inventory, if the slump persists for another three to four months, layoffs are likely in the industry,” he added.
Furthermore, he also blamed India's weakening local currency for affecting the auto makers which use imported parts and may force them to raise prices to protect margins.
A stronger US dollar would likely result in higher fuel prices—India imports about three-fourths of the crude oil it requires—further hurting vehicle demand.
Despite the current gloomy scenario, Mathur kept SIAM's forecast for a 3 per cent-5 per cent increase in car sales for this fiscal year on expectations that demand will revive in the coming months, partly because of the introduction of new car models.
Even the automobile exports sector saw a decline during April-May 2013 by (-) 8.62 per cent.
Meanwhile the export of passenger vehicles and three wheelers grew by 7.34 per cent 26.53 per cent respectively, while the export of commercial vehicles and two wheelers dropped significantly by (-) 19.62 and (-) 16.50 per cent respectively in April-May 2013 over April-May 2012. (KNN)
The local industry associations fear auto makers and their parts suppliers who directly employ a million workers, including permanent, temporary and contractual ones will cut jobs.
Recently, even the bonus of all time high double-digit discounts and cask back schemes failed to attract the customers.
Even the original equipment manufacturers may follow the loss, if the demand for cars continues to be low.
With the manufacturers cutting down their production by 4.08 per cent last month, it is feared temporary and contractual employees working on the shop floor may be laid off if the slowdown continues through the next few months.
In May, car sales fell 12.26 per cent to 1, 43,216 units.
Last month, utility vehicle sales grew a mere 4.2 per cent to 42,330 units.
In 2012-13, utility vehicle sales rose 52 per cent. However in May, overall, passenger -car, vans and utility- vehicle sales dropped 8.9 per cent to 2, 01,437 units.
While sales of commercial vehicles declined 10.6 per cent to 55,458 units, motorcycle sales fell 0.7 per cent to 8,81,288 units.
A 13 per cent growth in scooter sales saved the blushes for the two-wheeler industry, which grew by 1.13 per cent during the month. That, however, was not enough for overall sales that declined 0.93 per cent during the period.
Motorcycle sales declined 0.72 per cent to 8,81,288 units from 8,87,646 units in year-ago month. Market leader Hero MotoCorp posted a decline of 2.11 per cent in its sales at 4,92,044 units. Rival Bajaj Auto, saw its bike sales grow 2.6 per cent at 2,12,129 units, while that of Honda Motorcycle and Scooter India (HMSI) was down 2.79 per cent to 85,866 units during the month.
The overall domestic sales during April-May 2013 declined by (-) 0.64 per cent over the same period last year.
In the truck and bus segment, sales dropped 11 per cent from a year earlier in May to 55,458 units.
The decline is because of lower industrial activity and a fall in freight rates, director general of the Society of Indian Automobile Manufacturers (SIAM), Vishnu Mathur said.
The light truck and bus segment posted a 7 per cent drop in sales in May—the first since March 2009.
During May, Maruti Suzuki India registered 8.25 per cent decline in domestic sales at 66,342 units. Rival Hyundai Motor India posted a marginal increase of 0.35 per cent at 32,052 units, while Tata Motors saw its sales dip by 48.60 per cent to 8,927 units.
“This is the longest stretch of consecutive declines in car sales. Commercial vehicle sales have fallen for the 15th consecutive month. During the downturn of 2008-09, the stimulus package announced by the government had helped revive the industry. With the excise duty raised in the Budget this year, sales of utility vehicles, which had recorded strong growth last financial year, have also slowed,” Mathur said.
“The decline in sales is across segments. The drop in motorcycle sales is particularly of concern, as it shows even demand from rural areas has slowed. With manufacturers shutting plants to control inventory, if the slump persists for another three to four months, layoffs are likely in the industry,” he added.
Furthermore, he also blamed India's weakening local currency for affecting the auto makers which use imported parts and may force them to raise prices to protect margins.
A stronger US dollar would likely result in higher fuel prices—India imports about three-fourths of the crude oil it requires—further hurting vehicle demand.
Despite the current gloomy scenario, Mathur kept SIAM's forecast for a 3 per cent-5 per cent increase in car sales for this fiscal year on expectations that demand will revive in the coming months, partly because of the introduction of new car models.
Even the automobile exports sector saw a decline during April-May 2013 by (-) 8.62 per cent.
Meanwhile the export of passenger vehicles and three wheelers grew by 7.34 per cent 26.53 per cent respectively, while the export of commercial vehicles and two wheelers dropped significantly by (-) 19.62 and (-) 16.50 per cent respectively in April-May 2013 over April-May 2012. (KNN)
Loading...
