Mumbai: Auto sales in August plummeted further south for ninth month in a row as car buyers stayed off new purchases owing to weak macroeconomic cues, high fuel prices and borrowing costs, according to monthly sales data released by a few of the manufacturers.
India’s economy grew at 4.4% in the April-June 2013 quarter, the slowest quarterly rate since the onset of the global financial crisis. The lower-than-expected growth followed a contraction in the mining and manufacturing sectors. Even the festive season which normally buoys buying sentiment is unlikely to give any major push to sales which will likely remain in negative terrain for the months ahead.
Passenger vehicles sales at utility vehicles market leaderMahindra and Mahindra Ltd dropped 28% to 15,821 units in August compared with the corresponding month a year ago, the company said in a statement. “The weakening rupee, resulting in increased inflation, is impacting cost of operations. Immediate action by the government is needed so as not to lose out on the upcoming festive season wherein sales could look up and bring some cheer for the auto industry and add additional revenue to the government,” said Pravin Shah, chief executive automotive sector at Mahindra and Mahindra.
At Toyota Kirloskar Motor Pvt. Ltd, too, sales declined 14% to 12,007 units compared with the year-ago period. “The market is still sluggish; however we hope to see it improve with a good monsoon and the upcoming festive season,” said Sandeep Singh, deputy managing director and chief operating officer, marketing and commercial, at Toyota Kirloskar Motor. The festive season begin this month with Ganesh Chaturthi followed by Navratri, Durga Puja, Deepawali and Christmas. Meanwhile, the company has increased prices of its vehicles by 1% owing to the depreciating rupee and rising inflation.
Passenger vehicles sales at Tata Motors Ltd during the month also skidded 48% to 11,564 units over the last year.
Meanwhile, an increase in fuel prices—petrol by Rs.2.35 per litre and diesel by 50 paise per litre last week—is likely to further dissuade buyers from new vehicle purchases.
VISHWA SHRIVASTAVA
PGDM 3RD
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