Auto sales misfire with 7% slide in July
THE domestic automobile industry continued to reel under high interest rates and poor demand as combined sales fell nearly 7% this July. Motorcycles took the biggest hit but passenger cars managed to post a double-digit growth. Monthly sales data released by the Society of Indian Automobile Manufacturers (SIAM) on Thursday revealed that total vehicle sales fell to 683,684 units in July against 730,194 units in July 2006. Passenger car sales were driven mainly by market leader Maruti Suzuki, which posted an 18% rise in volumes. Rivals Hyundai Motors, Tata Motors and Honda Siel Cars India, meanwhile, reported a sales decline. According to Religare Securities auto analyst Arvind Jain: “Companies that had launched new models have the benefit of product excitement and have done well in the market. While high interest rates are impacting retail sales, the new launches are pushing sales for Maruti, General Motors and Mahindra Renault. The trend is likely to continue till the festive month of October, when some new cars are expected to hit the market.” The two-wheeler segment continued its slump in July as motorcycle sales fell 17.25% at 375,004 units against 453,152 units in July 2006. Market leader Hero Honda posted a 14.49% sales fall at 186,848 units while rival Bajaj Auto saw a 17.2% dip at 116,305 units. Sales of the third-largest player TVS Motors dropped 41% at 35,237 units in July. But these firms made marginal gains in scooters, which grew 14.81% at 87,830 units as against 76,495 units last year. “While scooter sales are on the rise, there is some enthusiasm in the market with Bajaj Auto showcasing its revolutionary 125cc engine today. Its new DTS-Si engine, which the company claims will deliver a fuel efficiency of 109 kmph, is likely to restore some sentiments and push sales,” said Angel Broking analyst Vaishali Jajoo.