The story of cars and bikes is not a fairy tale anymore, with sales declining and discounts piling up. Slowing economy, continuing high interest rates on auto loans and the slowdown reaching even the hinterland have all been factors which are responsible for cars and bikes piling up across stockyards.
But the situation with trucks and buses is far worse, with production and sales both in doldrums. The only shining spots right now are utility vehicles, gearless scooters and light commercial vehicles. But these vehicles categories comprise a small portion of the overall vehicle sales matrix and therefore the industry has been feeling anxious for months now.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales were down for the third month in a row this fiscal in January while commercial vehicles have been in the negative territory all the 10 months of the fiscal. Now, even two wheelers are taking the slow lane, with scooter sales growing 17.7 percent between April and January but bike sales stagnating with a growth of just 1.43 percent. Since scooters are a largely urban phenomenon, its obvious that slowdown has hit the rural markets as well.
Also, domestic annual car sales are set to be in the negative territory for the first time in a decade with SIAM saying its growth forecast of 0-1 percent for this fiscal will not be met. In January, passenger car sales fell by 12.45 percent, the third consecutive monthly decline since November last year, to 1,73,420 units (1,98,079 units).
"The way car sales are at the moment, we may not be able to meet the forecast of 0-1 percent growth for the domestic passenger cars we made last month. It will be in the negative territory this fiscal," SIAM director general Vishnu Mathur said.
In January SIAM had lowered car sales growth projection to just 0-1 percent for this fiscal, from 1-3 percent and 9-11 percent announced in October and July, 2012 respectively. In April last year, it had forecast a growth of 10-12 percent for 2012-13.
The last time car domestic sales witnessed a decline was in 2002-2003, when they dropped by 2.09 percent. In the last decade, only once has growth been lower than this - in 2008-09 at 1.39 percent when the world economy was going through a downturn.
Between April-January this fiscal, car sales were down by 1.8 percent to 15,56,283 units compared to the year-ago period; even new model launches have not been able to have any impact on market sentiment. SIAM has already asked the government to lower excise duty on large cars in the forthcoming Budget by up to 40 percent and on small cars by 200 basis points to 10 percent.
In January, the country's top three car makers struggled to increase sale. Maruti Suzuki India posted a marginal rise at 88,557 units from 88,377 units in the same month despite it being the highest ever January sale for Maruti. Hyundai Motor India's sales grew just 1.45 percent to 34,247 units as against 33,756 units last year, while Tata Motors' domestic sales crashed by 60.76 percent to 11,192 units from 28,529 units in January last year.
Bike sales also lost momentum, growing by just about 7.45 percent in January to 886,527 units (825,050 units). Scooter sales were up 10.9 percent to 252,094 units (224,612) units in January. Sales of trucks and buses fell almost 39 percent last month.