Hyundai says sales down, urges government to do more (Lead)December 29th, 2008 - 7:25 pm ICT by IANS
New Delhi, Dec 29 (IANS) Hyundai Motors India Ltd, the country’s second largest car maker, Monday said the slowing domestic demand, fall in exports and increasing input costs have crippled sales this year, and urged the government “to do more” to save the auto industry. The company has received orders for 9,000 units for January, well below the expected 25,000, while the orders for February and March stand at 11,000 and 4,000 units respectively.
At the launch of the company’s new compact car i20 here, Hyundai India managing director Heung Soo Lheem said India-made vehicles were facing tough competitions in the European market, primarily due to high export duties levied by the government.
“India-made vehicles are not lucrative enough for the European markets like they used to be as the slowdown is hitting consumer sentiments worldwide,” he added.
i20 is the successor of i10 in the compact segment and is priced between Rs.479,900 and Rs.581,900.
According to Lheem, the premium compact segment is a “high growth segment” for the coming years.
“We believe that the high-end compact segment will grow much more rapidly as compared to other segments in the coming years,” he said.
The automaker had outlaid production and sale of 530,000 vehicles for the year (including exports) but with the global economic slowdown kicking in and impacting the credit flow, the company could sell about 485,000 units in the calendar year 2008.
Hyundai has invested Rs.60 billion (Rs.6,000 crore) for a new facility in Chennai for manufacturing premium compact models i10 and the i20.
Lheem said some form of government support was required for the auto export to sustain. The government should fix quotas for exporting cars in CBU (completely built-up) and CKD (completely knocked down) forms, he said.
Lheem said the recent reduction in central value-added tax (Cenvat) as part of the stimulus package announced by the government Dec 7 helped Hyundai clear its inventories as sales picked up this month.
He, however, added: “The government needs to do more in form of providing credit facility to potential buyers.”
“We will have to increase the prices some time in January because of rising cost of input cost and we expect sales to be slow. January will be very depressed in our outlook and the following two months will also be tough,” Lheem added.
The automaker lost about Rs.300 million (Rs.30 crore) in December because of reduction of prices, which were already lying in showrooms prior to Cenvat cut, he said.