Motown musings

The Indian passenger vehicle market continued its downward journey as car sales fell for the eighth consecutive month in June and medium and heavy duty vehicles registered a 16th straight month of year-on-year decline, reaffirming a deepening slowdown in the economy.
SIAM is considering to propose to the government a reduction in excise duty and scrapping of 15-year-old passenger vehicles.
Barring utility vehicles and scooters, which posted decent growth, all the other segments of the Indian automobile industry posted a drop in sales.
Passenger car sales were down 9% to 1,39,632 units, two-wheeler sales declined 4.6% to 1.1 million units, and even the light commercial vehicle segment, which was registering healthy growth till six months back, declined by 8.7%, pulling down the overall commercial vehicle market by 13.4% in June. What’s worse is that this fall is despite the numerous discounts and offers doled out by various car makers.
All players in this segment posted muted growth: India’s largest car maker Maruti Suzuki posted an 8% decline, Hyundai Motor India’s sales fell 1%, Tata Motors sales were down 33%, and Toyota’s sales fell 20%. However, Honda and Ford showed some growth, riding on new launches.
On the two-wheeler front, Hero MotoCorp reported sales decline of 6%, Bajaj Auto was down 20%, impacted by weak demand and labour issues at its Chakan plant. TVS Motor Company’s sales fell 7%, but Honda Motorcycle and Yamaha bucked the trend with 11% and 46% growth, respectively.
SIAM listed a host of issues behind the slide: poor economic growth, inflation still not under control, high vehicle finance rates, and excise duty hike.
Experts said they have never seen the industry post three consecutive months of sequential drop in passenger vehicles. The passenger vehicle sales for Q1 fell 7.24%, led by a double digit decline in sales of cars. The two-wheeler sales were flat 0.82% growth, thanks to the sustained demand for scooters, and the commercial vehicle sales fell 8.12%.