Interest rates, fuel hikes dampen automobile sales in June

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Production losses at industry leader Maruti Suzuki and a slump in sales because of high interest rates and rising fuel prices have resulted in a grim sales picture for the auto industry in June.

Crippled by a 13-day strike at its manufacturing facility in Manesar, and a planned shutdown at all its manufacturing facilities, Indian passenger car market leader Maruti Suzuki reported a drop of 8.8 per cent in its sales for June.

The sales stood at 80,298 vehicles as against 88,091 vehicles sold in June 2010.

Segment-wise, sales of the company's bestselling hatchback cars, including Alto, Wagon-R, Zen, Swift, Ritz and A-Star, grew by 2.3 per cent in June and stood at 52,599 units as compared to 51,418 units in June, 2010. However, there was a drastic drop in two other segments, pulling down the overall figures.

Exports dropped sharply by 32.7 per cent in June and stood at 10,278 units from 15,279 units in June last year.

The 13-day strike, which started on June 4, cost Maruti Suzuki a production loss of around 12,600 cars pegged at a value of Rs.380 crore.

The cumulative sales for the first quarter in the current fiscal which were effected by high interest and fuel cost, grew at a meager pace of 0.6 per cent at 281,526 units from 283,324 units in the corresponding quarter of 2010-11.

Sales of Tata Motors reported a marginal decline of one per cent at 66,358 units as compared to June 2010.

Segment-wise, commercial vehicles sales did well in the domestic market and grew by 13 per cent at 39,271 units compared to 34,791 units sold in June 2010. The company's LCV (light commercial vehicle) sales in June grew at a stellar pace of 18 per cent at 23,197 units over June last year.

But the dampener came from a drop of 22 per cent in the sales of the passenger car segment, including distribution off-take of Fiat cars, which Tata distributes. It stood at 23,499 units compared to 29,948 units in June last year.

Sales of Tata's entry-level car Nano were lower by 29 per cent in June at 5,451 units as compared to last year.

The cumulative sales in the first quarter of the current fiscal grew by 4 per cent at 187,946 units over 180,210 units sold in the first quarter of 2010-11.

Meanwhile, Indo-Japanese car manufacturing joint venture Toyota Kirloskar Motor came out with good sales figure with a growth of 94 per cent in June's sales.

Toyota Kirloskar last month logged a total sales volume of 12,034 units as compared to 6,180 units sold in June 2010. The product-wise sales for last month are: Corolla - 629 units; Innova - 4,665 units; Fortuner - 990 units; Etios - 5,002.

The three Chennai-based automobile manufactures including Hyundai, TVS and Ford too came out with good sales number for June.

Automobile giant Hyundai Motors reported 13.6 per cent in June at 52,531 units as against 46,253 units in June 2010.

"The market continued to be slow but Hyundai sales have grown partially due to the success of New Verna," said Arvind Saxena, director of marketing and sales, Hyundai Motor India Ltd, adding that the company had received over 21,000 bookings.

The company reported a sales growth of 11.1 per cent in the domestic market, where Hyundai sold 30,402 units as against 27,366 units in June 2010.

The exports surged by 17.2 per cent in June and stood at 22,129 units from 18,887 units in June 2010.

Two and three-wheeler maker TVS Motor Company Ltd closed June with sales growth of around 14 per cent with total sales of 182,456 units against 159,688 units in the corresponding month of the previous year.

The company exported 26,359 units last month as against 17,782 units shipped out in June 2010.

Ford India, the Indian subsidiary of the American car major Ford Motor Company, June sales grew by 7.80 per cent at 9,145 units in June 2011 including exports. A total of 8,483 units were sold in the corresponding period last year.