Automobile sales plunge to multi-year lows in Nov,Sector Bears The Brunt Of Economic Turmoil, Witnesses Major Downfall

New Delhi: Poor retail finance and negative sentiment worsened domestic auto sales in November which plunged to multi-year lows as customers postponed new purchases in view of uncertain economic situation. Car sales, which had been slipping, crashed by record levels with major companies like Maruti and Hyundai leading the downfall. According to sales numbers released by Society of Indian Automobile Manufacturers (Siam), November car sales dropped 19% to 83,059 units against 1.03 lakh units in same month last year. The year-onyear percentage drop was biggest in last five years since a 31% fall in February 2003. The situation has been no better in eight months of this fiscal as car sales growth shrunk to a mere 0.48% in April-November ’08 period. The numbers appear alarming as except for scooters that came up with positive numbers, all other segments were down. Worst fall was noticed in commercial vehicles, where sales plunged by 49.5% at 20,637 units (40,879). The slowdown has already seen companies like Tata Motors, Ashok Leyland and Eicher announce major production cuts and even close plants temporarily. automobile supplies Within commercial vehicles, medium and heavy vehicle category was the worst hit as sales slipped by 63% and closed November’08 at 8,325 units against 22,453 units with both Tata and Ashok Leyland slipping. and automobile manufacturers in india Fall in economic activity has been a big dampener and freight operators are not willing to make any new purchases, analysts said. “In our history, all segments have never been down so badly together in a month,” Siam’s director general Dilip Chenoy said after releasing the sales numbers. automobiles manufacturers Motorcycle sales were also down and fell 20% at 4.3 lakh units against 5.4 lakh units in November last year. A sharp decline in sales of heavyweights like Bajaj Auto and TVS pulled the numbers down. Scooters, however, remained the sole category, where numbers grew, as sales were up 12%. Good growth reported by Honda Motorcycle and Scooter India and Hero Honda led to this increase. Analysts feel that the 4% excise duty cut announced by government would not immediately revive auto sales. “While it will make cars cheap, real booster will come when financing becomes easy and interest rates climb down,” the analysts said. “Banks must cut their rates and start lending more,” Chenoy said.