Motown musings

Domestic passenger car despatches continued to slide for the seventh consecutive month in May, the first time in ten years.

Leading economic indicators continue to be pessimistic. Slowing growth, high fuel prices and interest rates, coupled with uncertainty keep vehicle buyers away from automobile showrooms.
Domestic passenger car despatches by automobile companies in May were down 12.26% on year to 143,216 units. The near future also appears gloomy, with SIAM not seeing passenger car sales growing on an on-year level for at least the next three months.
The industry body is relying on the prospects of good monsoon to help prop up rural demand. Over the past few years, leading passenger car manufacturers have sold 30-40% of their cars in rural India, SIAM’s deputy director general Sugato Sen said, adding that urban demand for cars would only pick up after the salaried class of buyers are assured of their incomes growing well.
Sen said that automobile component manufacturing companies have started cutting jobs due to slowing sales, and original equipment manufacturers would also soon have to do the same if the present slowdown persists longer. Currently, automakers are cutting output to manage increasing dealer inventory.
In May, domestic passenger car despatches by market leader Maruti Suzuki India were down 8.25% on year to 66,342 units. Hyundai Motor India Ltd’s passenger car despatches were up 0.35% at 32,052 units.
Tata Motors’s domestic car despatches were down 49% on year to 8,927 units. On the other hand, Honda Cars India Pvt Ltd’s despatches were up 9.3% on-year to 11,274 units. Utility vehicle despatches for May grew 4.17% on year to 42,330 units. Mahindra & Mahindra’s domestic utility vehicle despatches for May were up merely 3.3% on year.