Car sales grow slowest in over two years

Domestic passenger car sales saw its slowest growth in 27 months in June this year at 1.62 per cent, mainly due to hikes in lending rates and production loss due to the 13-day strike at Maruti Suzuki's Manesar unit.

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Car sales in the country stood at 1,43,370 units in June, this year against 1,41,086 units in the same month last year, according to figures released by the Society of Indian Automobile Manufacturers (SIAM) on Monday.

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"This is the slowest growth rate since March, 2009, when the increase was just 1.16 per cent," SIAM Senior Director Sugato Sen told reporters here.

The auto industry has started slowing down in this fiscal with the passenger car segment growing by only 7 per cent in May. Before that, that car sales grew by just single digit was in June, 2009, at 8.23 per cent.

"All the segments grew moderately. Interest rates hike and rising fuel prices have affected the consumers' decision to buy vehicles," SIAM President Pawan Goenka said.

The passenger vehicle segment's lower than expected performance was also because of the 13-day long strike at the market leader Maruti Suzuki's plant in June that had resulted in production loss of about 12,600 units.

"Maruti is the market leader in the car segment. The production loss due to the major strike at its plant affected the entire segment's performance. Another major car maker Tata Motors' sales were also down," Goenka said.

During the month, Maruti Suzuki India posted a 6.39 per cent decline in domestic car sales at 57,653 units.

Rival Hyundai Motor India's sales grew by 10.73 per cent at 30,302. Tata Motors saw a decline of 23.49 per cent in sales to 18,522 units during the month.

According to SIAM, the total two-wheeler sales increased by 14.59 per cent last month to 10,71,425 units from 9,34,975 units in June, 2010.

Motorcycle sales grew by 14.97 per cent during the month to 8,25,323 units from 7,17,859 units in the corresponding month last year.

Hero Honda continued its impressive performance with a 19.55 per cent increase in sales to 4,68,310 units. Rival Bajaj Auto also posted a 12.06 per cent increase to 2,08,883 units during the month, while Honda Motorcycle and Scooter India (HMSI) saw its bike sales grow by 4.31 per cent to 61,435 units.

Chennai-based TVS Motor Co saw its motorcycle sales falling marginally to 50,835 units during the month.

The scooters segment witnessed a growth of 10.99 per cent in sales during June this year to 1,82,653 units from 1,64,567 units in the same month last year.