Car Sales In India Fall Over 12 Per Cent In May

11 June 2013

Indian automobile manufactures saw car sales decline by more than 12 per cent in May, raising the spectre of production cuts and job losses, as a slowing economy continued to affect consumer sentiment for the seventh consecutive month.



Local car sales dropped to 143,216 units in May, showing a 12.3 per cent year-on-year decline, data released by the Society of Indian Automobile Manufacturers (SIAM) showed.



This is the first time that car sales have fallen for seven months in a row since the association started compiling data 16 years ago, the data revealed.



SIAM attributes the declining trend in car sales to a variety of factors, including the overall economic slowdown, high interest rates and lack of confidence among customers of retaining income flows.



''This continuous decline is a combined factor of the overall economic situation,'' said SIAM director Vishnu Mathur, adding, ''People aren't confident of retaining their jobs.''



Also, even if these are overcome, loan rates are still high, despite the recent moderations, Mathur pointed out.



Mathur said some automakers and parts suppliers have started idling factories as they hold unsold stock and this could lead to job cuts.



''Obviously, if there is a decline in demand, there is an impact in the whole chain,'' said Mathur. ''More vulnerable are the suppliers. It has either started to happen or will happen soon if such a situation continues,'' he said.



Sales of motorcycles fell 0.7 per cent in May to 881,288 vehicles, SIAM said, while truck and bus sales were down 10.6 per cent to 55,458 vehicles.



Overall sales of passenger vehicles declined by 8.56 per cent during April-May 2013 over the same period last year.



Within passenger vehicles, sale of passenger cars and vans dropped by 11.33 per cent and 10.88 per cent, respectively, while utility vehicle sales grew marginally by 4.08 per cent during April-May 2013 compared to the same period last year.



During April-May 2013 overall automobile exports declined by (-) 8.62 per cent. Export of passenger vehicles and three wheelers grew by 7.34 per cent 26.53 per cent, respectively, while sales of commercial vehicles and two-wheelers dropped significantly by 19.62 per cent and 16.50 per cent, respectively, in April-May 2013 over April-May 2012.



The industry produced 1,737,548 vehicles in May 2013 as against 1,811,515 in May 2012, a decline of 4.08 per cent over the same month last year.

Source:-www.domain-b.com