At 3.4 percent, April 2012 car sales plunge to a new low, slowdown looms ahead

INDIA’S TOTAL AUTO sales across cars, commercial vehicles, two-and three-wheelers rose by 10 percent in April 2012 to 1,472,385 units as against 1,338,430 units in April 2011.

Passenger car sales went up by only 3.4 percent – 168,351 units – the slowest in 10 months, clearly hit by rising fuel prices, high interest rates and inflation. While medium and heavy CVs fell by 11.6 percent, LCVs (goods and passenger vehicles) were up by 14 percent. With the emphasis on last-mile transportation and the impact of the Grameen roads building project, sales have seen a substantial increase. Ashok Leyland's Dost and Tata Ace rival has sold over 5,000 units in 2011-12's last quarter.

Two-wheelers overall were up 10 percent; bikes and step-throughs went up nearly seven percent to 861,602 units.

As per the data released by the Society of Indian Automobile Manufacturers (SIAM), overall automobile exports registered a marginal growth rate of 1.29 percent in April 2012. Passenger vehicles registered negative growth at (-10.47) percent in the month. Commercial vehicles and three-wheelers also recorded deceleration at (-13.62) percent (-20.50) percent respectively. Only two-wheelers exports grew by 9.18 percent during the month.

April sales in the domestic market are usually lower as buyers tend to bunch up their purchases in the last month of the fiscal. SIAM has forecast that the passenger vehicle sector will grow by 10-12 percent in 2012-13 but it remains to be seen how a fuel price hike impacts buyer sentiment.

BRIAN DE SOUZA