Auto sales sluggish despite Reserve Bank boost: MahindraJanuary 16th, 2009 - 7:04 pm ICT by IANS
Kolkata, Jan 16 (IANS) Automobile sales are not picking up as commercial banks have not eased auto loan rates, a senior official of utility vehicle major Mahindra and Mahindra (M&M) said here Friday.”The Reserve Bank of India (RBI) has given a directive to banks to ease lending rates for automobile loans. The banks are yet to respond,” Pawan Goenka, president of M&M’s automotive division said on the sidelines of the launch of multi-purpose vehicle Xylo.
“Customers are very hesitant, the confidence level is lacking. This is due to the overall economic scenario,” Goenka said.
To illustrate his point, he said sales of Scorpio - a special utility vehicle from the M&M stable - dropped to around 2,500 in November and December from 3,000 a month earlier due to the slowdown.
However, Goenka said the company was going ahead with its Rs.40-billion (Rs.4,000- crore) greenfield project in Chakan near Pune to manufacture medium and heavy commercial vehicles. The facility will be completed by next year.
Despite falling sales, Goenka was optimistic of the future, saying M&M was looking at a turnover of Rs.100 billion by 2011; it was Rs.80 billion in 2007-08.
Regarding the newly launched Xylo, he said the company has set no sales target. “We will manufacture 2,000 Xylo units per month. If the demand is higher, we can increase our production accordingly.”
M&M will launch the left-hand drive version of the car for the international markets by February 2010.