The new fiscal year failed to bring any cheer for the Indian vehicle industry with the country’s domestic passenger car and commercial vehicle sales continuing to decline.
Domestic passenger car sales declined 10.1% on year in April to 135,433 units as negative sentiments due to gloomy macro-economic conditions continued to plague demand despite cut on excise duties on automobiles, the Society of Indian Automobile Manufacturers said. According to SIAM, this was the worst monthly decline in domestic passenger car sales since May last year.
The country’s commercial vehicle sales fell 24.0% in April to 43,080 units from 56,683 units a year ago.
Explaining the reasons for the continued sales dip despite reduction in excise duty in the Budget, SIAM Deputy Director General Sugato Sen said: “What is happening is that we are unable to recover from the negative sentiment. We need a trigger to change the sentiment.”
Sen said the change would be possible only after a new government comes to power and announces measures to kick start the economic growth during the full Budget.
“The current rate of 4-5 per cent growth is not enough. For a healthy growth of the automotive sector, we need the economy to grow at over 7 per cent,” Sen said, adding the forecast of a deficient monsoon is also a concern.
Factors like high interest rates, fuel prices and inflation are still affecting demand.
When asked why the reduction in excise duties hasn’t resulted in demand surge, he said: “Today, even after the cut, the cost of ownership is extremely high. The small car customers are the most vulnerable under the current circumstances.”
In the two-wheeler segment, total sales in April grew by 11.67 per cent to 13,04,447 units.