Car sales remain weak ahead of festivals - Times of India

Sales have been under pressure over the past many months and the spiralling fuel prices have only added to the pressure on buyers, who have been shying away from new purchases.

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NEW DELHI: Car sales continued to remain under pressure due to an uncertain economy and high interest rates as companies reported weak numbers ahead of the crucial festive season that begins later this week. Only companies with new models like Honda and Ford reported a double-digit growth in volumes as others like Hyundai, Mahindra, Toyota and Tata Mo tors reported a year-on-year decline in volumes in September, while market leader Maruti managed a 2% growth.

Sales have been under pressure over the past many months and the spiralling fuel prices have only added to the pressure on buyers, who have been shying away from new purchases. Many companies are saddled with heavy inventory levels at dealerships, despite throwing in attractive discounts and freebies. "In the current market scenario, volume growth is a big challenge... We expect market challenges to continue and have a cautious optimism for the upcoming festive season," said Rakesh Srivastava, Sr VP at Hyundai Motor India. The company's sales fell 1% in September.

Other companies also remain equally pessimistic. "While there has been a growth over August 2013, it is not to the extent that makes us comfortable, especially as we approach the festive season. Factors such as increase in input and raw material costs and the depreciating rupee have not helped... The auto industry needs a trigger in terms of a stimulus to boost consumer sentiments, leading to a turnaround in the sector as well as a revival of the economy in general," said Pravin Shah, CEO of the automotive division of Mahindra & Mahindra.

The weak numbers display the nervousness of the industry as these come just days before start of the festive season. With piled up inventories, companies have been cautious in the wholesale deliveries to dealerships. "The market continues to remain depressed due to weak economic conditions, negative market sentiments and various other factors," said P Balendran, VP at General Motors India.

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