Thaindian News

New Delhi, Sep 2 (IANS) Automobile sales in India are expected to pick up from mid-September as a precursor to the festive season, the Society of Indian Automobile Manufacturers (SIAM) said Friday.

“We do expect the markets to pick up somewhere around mid-September before the festive season begins,” Vishnu Mathur, director general, SIAM, told reporters at a press briefing here.

According to Mathur, the auto industry was reeling under the pressures of high input costs coupled with rising fuel and interest costs which have dampened consumer sentiment.

“The consumer sentiment is down right now, because of which the footfalls at the showroom are not being converted into purchases,” he said.

Mathur added that high interest rates are also deterring small and medium enterprises in the automobile sector in their expansion plans.

“The most effected are the tier-I and II companies who need to borrow money for their expansion plan,” he said.

Commenting on the sales figures for August, Mathur said: “It is too early to give an accurate figure as data from some major companies have not come in yet. But there are signs of slowdown.”

On Thursday, automobile majors such as Maruti Suzuki, Hyundai and Tata Motors came out with dismal August sales figures, Maruti Suzuki’s August sales falling 12.7 percent, partly because of labour unrest at its Manesar factory.

Hyundai Motors’ too came out with dismal August sales with a marginal growth of one percent, powered by a 10.5 percent increase in exports.

According to the data furnished by SIAM, the growth rate of the industry during April-July was 13.55 percent. However, the rate was the lowest in two years for the June-July period.

“The passenger car sector is certainly hit because of low conversion rates from enquiry rates to purchases due to high interest rates, but on the other hand, initial data from the two-wheeler segment has shown positive growth,” Mathur said.

Mathur’s view was corroborated by the fact that unlike car manufacturers, two-wheeler majors posted good sales in August.

Hero MotoCorp reported an increase of 18.6 percent in sales for August at 503,654 units as compared to 424,617 units sold in the same period last year.

Two-wheeler and commercial vehicle major Bajaj Auto also came out with stellar August sales which rose 16 percent at 382,739 units — its highest ever in a single month. Vehicle exports rose 40 percent in the month under review at 138,225 units.