Automobile sales dip again after 8 months

The domestic automobile industry reported a 0.54% decline in sale of passenger vehicle last month, the first drop since October last year, in a clear indication that the improved sentiment following National Democratic Alliance's thumping victory in the national elections last year maybe wearing off.

Sale of four-wheelers registered a growth of 1.5% over last June, but a 5.7% decline in sale of utility vehicles and SUVs and 7.2% drop in sale of vans constrained the overall numbers.

Industry lobby Society of Indian Automobile Manufacturers (SIAM) blamed maintenance shut downs at three companies last year for the subpar growth but there is no hiding that sales have remained static since April, generally considered the worst month for buying cars.

"There is a worry as volumes have not picked up as they should from April to June. Maybe the effect of the optimism following the election last year is wearing off. We need fundamental reforms on the ground," said Vishnu Mathur, director general, SIAM.

A flurry of launches in the next few months, including Maruti and Hyundai launching their compact SUVs, leading up to the festive season in October is expected to arrest the slide.

"We have seen in the last two years that every time new models are launched sales go up automatically," said Vikram Kirloskar, president, SIAM.

A marginal 0.05% growth in sale of motorcycles provided the faint ray of hope. Sale of mobikes had been continually declining since September last year hampered by unseasonal rains at the start of the year that resulted in poor rural income.