Car sales up 7% in July on last year's low base, diesel demand

Despite tough market conditions, car sales in India grew by 6.71% during July, mainly on account of low base in last year due to strike at Maruti Suzuki's Manesar plant.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM), domestic car sales in July stood at 1,43,496 units as against 1,34,473 units in the same month last year.

'Car sales are growing mostly due to diesel models, which have also started seeing moderation in demand except for one or two models. This year's car sales growth has also been magnified by the low base of last year due to strike in Maruti,' SIAM director general Vishnu Mathur told reporters.

Country's largest carmaker Maruti Suzuki India had witnessed strike by workers at its Manesar plant in June last year that had severely hit production.

The ongoing lockout at Maruti's Manesar plant, which was declared on July 21, will start impacting the industry's numbers from this month and going forward, he added.

'There is nothing positive which has happened last month to spur growth, except for slight moderation in petrol prices. Otherwise, interest rates remain high and consumer sentiments are down,' Mathur said.

He said the industry is 'hoping that the new finance minister would take up steps so that there could be moderation of interest rates and the gap in the prices between petrol and diesel fuels is reduced so that demand can pick up again.'

In the passenger car segment, market leader Maruti Suzuki's sales jumped by 8.32% to 56,851 units.

Rival Hyundai Motor India's sales increased by 7.84% to 27,500 units. Homegrown auto major Tata Motors' car sales were up by 51.13% at 21,153 units.

In July, total sales of vehicles across categories registered an increase of 7.53% to 14,46,959 units from 13,45,644 units in the same month last year.

Total two-wheeler sales last month increased by 7.45% to 11,32,696 units from 10,54,120 units in July 2011.

According to the SIAM data, motorcycle sales in the country grew 4.98% during the month to 8,21,821 units from 7,82,852 units in the same month last year.

'Bike sales is the slowest since March this year, which was at 1.15%,' Mathur said.

In this segment, market leader Hero MotoCorp posted 1.03% fall in sales to 4,36,994 units in July. Rival Bajaj Auto's sales went down marginally to 2,00,535 units.

However, Honda Motorcycle & Scooter India (HMSI) posted a 95.86% increase in sales to 1,01,692 units, while TVS Motor moved 36,461 units, 24.18% less than the corresponding month of the previous year.

The scooter segment's overall sales grew by 20.39% to 2,47,213 units from 2,05,335 units.

HMSI's scooter sales grew by 40.09% to 1,25,899 units in July, while Hero MotoCorp sold 36,039 units, up 7.87%. TVS Motor's sales saw decline of 12.17% during the month to 40,683 units.

Commercial vehicles sales grew by 1.20% to 65,008 units during the month, from 64,234 units in the year-ago period, SIAM said.

'The real cause for concern is the CV segment. Both the medium and heavy commercial vehicles and light commercial vehicles are slowing largely because of overall economic slowdown,' Mathur said.

Medium and Heavy Commercial Vehicle sales declined 14.84% to 23,171 units during the month compared to 27,210 units in July last year.

According to SIAM, light commercial vehicle sales grew 12.99% to 41,837 units in July 2012 from 37,027 units in July 2011.

In the three-wheeler category, sales went up marginally to 44,286 units from 43,948 units in the same month last year.

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