Auto sales fall in April-May, SIAM warns of job losses

The bad news continues for the Indian auto industry. Vehicle sales fell for the seventh consecutive month – growth has slumped to a meagre 0.64 percent in the April-May 2013 period over the same period last year.

While the passenger vehicles segment fell 8.56 percent, passenger cars and vans were the worst affected, down 11.33 percent and 10.88 percent respectively. Utility vehicles fared better, growing marginally by 4.08 percent. Top SIAM officials say that the industry now faces the loss of jobs at the Tier 2 and Tier 3 levels as component suppliers rationalise production for lower volumes.

Commercial vehicles also took a hit, posting negative growth of 5.20 percent year on year. The Medium & Heavy Commercial Vehicles (M&HCVs) segment continued its poor showing, declining 12.11 percent. Also affected were light commercial vehicles (LCVs) with sales falling by 1.36 percent. This is significant given that LCVs have been the mainstay of OE sales and are a key part of last-mile connectivity.

Three-wheeler sales though recorded marginal growth of 1.47 percent. Passenger carriers and goods carriers saw growth of 1.48 percent and 1.44 percent respectively over the same period in the previous year.

Two-wheelers also recorded growth, albeit flat, of 1.04 percent piggyback- riding on the growth in the scooter segment that saw sales increase by 13.88 percent in April-May 2013 over April-May 2012. Mopeds and motorcycles declined by 11.45 percent and 1.38 percent respectively. The slowdown in the industry has also affected vehicle production. The numbers manufactured declined to 1,737,548 vehicles in May 2013 against 1,811,515 in May 2012, a drop of 4.08 percent.

On the export front, overall automobile exports during April-May 2013 declined by 8.62 percent. While passenger vehicles and three-wheeler exports grew by 7.34 percent and 26.53 percent respectively, those of CVs and two-wheelers dropped significantly by 19.62 and 16.50 percent respectively during April-May 2013 over the same period in 2012.