Car sales in April 2012 slowest in 10 years

Post-Budget price hikes and rising interest rates have taken a toll on passenger car sales. According to industry body Society of Indian Manufacturers Association (SIAM), passenger car sales grew just 3.4 per cent in April 2012 compared to the same month last year with 1,68,351 passenger cars sold in April 2012 as against 1,62,813 units in the year ago period. The 3.4 per cent growth is the slowest for the month of April in a decade.

The small car segment is the worst affected with just a 0.70 per cent increase, reflecting the price sensitive nature of the entry-level segment. However, sales of utility vehicles shot up sharply, perhaps, spurred by demand for the newly launched Maruti Suzuki Ertiga. The MUV was reported to have registered 11,000 bookings in just five days after its launch on April 12, 2012. Overall, sales in the UV segment grew 47.32 per cent, up nearly 31 per cent from March 2012!  

In March 2012, sales had touched a record high of 19.66 per cent with over 2 lakh vehicles sold after customers advanced car purchases over post-Budget price hike concerns. However, sales in coming months are likely to remain weak with some states raising duty on cars and fuel prices set to rise yet again. The only silver lining is a possible softening of interest rates.

According to SIAM sales are expected to pick up only by the second half of the year when the festive season begins. The industry body is confident of a 10-12 percent sales growth for the Indian automotive industry in 2012. Vishnu Mathur, Director General, SIAM said: "Indian car market should bounce back this year with the Reserve Bank of India likely to rollback the rate increase as there is a perceptible drop in inflation. The number of car owners is still low in the country and this goes to show the humungous growth potential for the Indian automobile industry.”