Vehicle sales post biggest drop in Nov

The four percentage-point excise relief for vehicle makers announced couldn’t have come at a more opportune time. As per November domestic sales figures released by the Society of Indian Automobile Manufacturers (SIAM), the industry saw an 18% decline to 7,11,281 units (8,67,243 units in the same period previous fiscal). This is perhaps the single-largest decline, spread across almost all vehicle categories, since 2000-01.
And even though sales remained in the positive territory between April and November at 6,625,988 units against 6,466,010 units during the same eight months last year, there is every danger that domestic vehicle industry is slipping into a prolonged slowdown.Exports, however, have managed to continue their good run so far. Between April and November, exports registered 33% growth to 1,064,788 units (800,382 units) but they zoomed by 62% to 146,337 units (90,398 units) last month.So, given the all round decline in domestic sales, excise relief should have spelt good news for all vehicle makers. Almost all passenger vehicle makers have already announced commensurate price reduction over the last two days but commercial vehicle companies are yet to take a call.
Meanwhile, car dealers aver that finance availability still remains an issue. Also, a dispute over who will pay for the unbilled stock or stock-in-transit (manufacturer or the dealer) when the duty cuts were announced remains unresolved.On top of all this, December is traditionally a slow sales month since customers wait for 2009 models which become available from January one. So unless dealers liquidate stocks in the next fortnight, excise duty cuts would be of little help since inventory would be carried over to January when dealer margins would virtually vanish under hefty price discounts for 2008 models.
During the April-November period, passenger cars remained almost flat at 7,82,344 units (7,78,588 units). But commercial vehicles registered the biggest decline in any vehicle category at almost 17% to close this period at 1,35,542 units (1,63,073 units).Three wheelers declined by 3.4% to 2,41,123 units (2,49,537 units) while two-wheelers managed to remain in the positive territory with 3.76% growth at 5,109,760 units (4,924,390 units).