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Car makers bear the brunt as car sales growth slumps to two-year low in July

By Motortrend India Staff   |   01 August,2011

Car sales in India hit a two-year low in July as rising costs, costlier loans and higher fuel prices prompted customers to postpone purchases of new vehicles.

Initial reports from automobile makers showed a 9 percent drop in sales of new passenger vehicles over July 2010 when 2.02 lakh cars and SUVs were sold. The Society of Indian Automobile Manufacturers compiles and releases the exact figures towards the middle of every month. Car sales, which are seen as a key barometer of the country’s economic health, had jumped 30 percent in the fiscal year ended March.

Maruti Suzuki, India’s biggest automaker, led the decline reporting a record 26 percent fall in monthly sales to 66,504 units. The company said a halt in the production of its popular Swift hatchback in the run up to the launch of a new variant and a shift in the manufacturing facility of Swift Dzire sedan were largely responsible for the steep fall in sales.

“We lost huge numbers as our best-selling car, the Swift, has been discontinued, and the Swift Dzire will now be manufactured only in Gurgaon,” said Mayank Pareek, managing executive officer (marketing & sales) at Maruti Suzuki. “Due to re-organising the production arrangement, we managed to dispatch 2,500 (Swift and Dzire) against 22,000 last year.”

Hyundai Motor India, the country’s largest car exporter and second-largest manufacturer, posted a 11 percent drop in sales to 25,642 units. The company had sold 28,811 cars in July 2010. “The July sales, for both the industry as well as Hyundai Motor India, had been negative,” the company’s director (marketing and sales) Arvind Saxena said. “Though customer enquiries have increased, but due to the increase in fuel price and interest rates, conversion rate has slowed down.”

Sales at Tata Motors were also negative with the company registering a 38 percent fall in passenger vehicles to 17,192 units. The company had sold 27,865 units in the same month last year, it said in a statement. Sales of its Nano minicar fell 6 percent to 3,260 units during the month, while the Indica range reported 32 percent drop in sales to 5,860 units. Indigo, another brand from the Tata stable, recorded a 30 percent decline in sales to 4,877 units, while Sumo, Safari and Aria fell by 2 percent to 3,195 units in July this year.

Companies such as General Motors and Toyota Kirloskar Motors, which have launched new models in recent months, managed to beat the overall industry trend. General Motors India registered a 34 percent growth in sales on the back of newly-launched diesel variant of Beat car. The company sold 9,508 units in the month over 7,124 in July last year.

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