Car sales in November fall despite higher discounts

New Delhi: Domestic passenger car growth again turned negative in November, a month when production was also negative.

In calendar 2012, August was the first month when domestic passenger car growth turned negative for the first time at -18.5%, followed by -5.36% in September.

Festival cheer kept sales from sliding into negative territory again in October but things are back to being difficult in November.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), passenger car sales declined 8.25 percent to 158,257 units (172,493 units) despite all-time high discounts as interest rates remained high.

Even two-wheeler sales were subdued with sales of motorcycles flat at 867,518 units (867,088 units). A SIAM official said bikes sales are being impacted because the slowdown and muted market sentiment have now reached the rural markets as well. Until now it was largely be an urban phenomenon.

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Car and two-wheeler debacle may force SIAM to once again revise its forecast for 2012-13 downward, the third time in a year.

Total sales of vehicles across all categories were also almost flat as they grew a mere 1.79 percent to 15,15,600 units (14,88,894 units).

[caption id=“attachment_551953” align=“alignleft” width=“380”]  Less vehicles are being produced since healthy festival sales in some categories have failed to take care of vehicle stockpiles across most dealerships. Reuters[/caption]

“The carryover from the festival season was not there. Market continues to be tough due to the same reasons such as the high interest rates and fuel prices and low consumer sentiments,” SIAM Director General Vishnu Mathur said.

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This is the steepest decline since August 2012 when the sales dropped 18.56 percent.

And December is unlikely to bring any cheer for vehicle makers. Being the last month of the year, sales are the slowest in this month since customers wait for the new year to get a new chassis number on their vehicle. This helps in vehicle resale.

During November, total commercial vehicle sales were down 7.31 percent to 61,410 units (66,254 units). Medium and heavy commercial vehicle sales declined 33.22 percent to 17,441 units (26,119 units) while light commercial vehicle sales grew 9.55 percent to 43,969 units (40,135 units).

In the three-wheeler category, sales went up 20.67 percent to 51,670 units (42,821 units).

The data released by SIAM shows that not just domestic sales, even production was in the negative territory for all vehicle categories (except three-wheelers where growth was a marginal 0.01 percent).

Car production was down by 27,841 units while the country produced 131,710 less motorcycles compared with November 2011. The highest production growth of over 51 percent was seen in utility vehicles (large cars mostly powered by diesel) at 47,043 units (31,143 units).

Less vehicles are being produced since healthy festival sales in some categories have failed to take care of vehicle stockpiles across most dealerships.

On the export front, passenger cars grew over 24 percent to 51,667 units (41,586 units) but exports in all other vehicle categories were on the decline.

Total commercial vehicle exports fell 21.5 percent to 5,741 units (7,313 units) whereas three-wheeler exports were down 3.65 percent to 28,669 units (29,755 units). Two-wheeler exports fell 7.29 percent to 153,480 units (165,545 units).