11.5.13

Motown : April 2013



High ownership costs and subdued economic growth saw car sales sink to new lows as growth fell for the sixth month in running as buyers deferred purchases despite attractive schemes and discounts. The fall in April completed a half-year of woes for car makers and industry body Society of Indian Automobile Manufacturers (Siam) said this is the longest continuous stretch of decline over the last 16 years.
According to numbers released by Siam, car sales fell 10% in April at 1.5 lakh units against 1.68 lakh units in the same month last year. Car sales had fallen 7% in 2012-13, and this was the first full-year fall in a decade. High interest rates and inflation had dampened the mood of buyers through most parts of last fiscal and the weak economy only compounded the problems further. Most of the car makers cut production as sales were not picking up despite offering steep discounts and other freebies to increase footfalls at showrooms.
Companies, however, hope that gradual softening of interest rates and a recent cooling off of petrol prices may add some buoyancy.
While Maruti managed a growth even in tough times, things were difficult for second-biggest car maker Hyundai, which saw a decline in year-on-year numbers in April. Car sales have never fallen for six straight months since the association started compiling industry data in the fiscal year ended on March 31, 1998. The slowdown has also caught up with the motorcycle market, where volumes fell 2% at 8.6 lakh units against 8.4 lakh units in the same month last year.

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