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Auto sector misses festival cheer, October sales lowest this year

By Motortrend India Staff   |   01 November,2011

Car sales fell to the lowest level this year in October, with the festive month providing little cheer to the sector hobbled by costlier loans, high fuel costs and labour unrest at market leader Maruti Suzuki. The traditional step-up in demand seen during festive season was clearly missing as the second biggest carmaker, Hyundai Motor India, also reported a decline in sales, compared to the same period last year.

Maruti Suzuki’s sales slipped more than half, down 52 percent to 51,458 units, compared with 1,07,555 cars sold last October. The company, which also posted its worst quarterly results on Saturday, with a 60 percent slide in profit for the July-September period, attributed the decline to the recurring workers’ unrest that led to an output loss of more than 40,000 cars.

“The labour unrest at Manesar plant during October adversely impacted both production and sales of cars in the Indian market,” a statement from Maruti said. Production loss impacted the company’s exports, which fell 64 percent to 4,137 units in the month. Hyundai posted a 5 percent decline in its domestic sales to 33,001 units, while exports declined by a sharper 12 percent to 15,325 units. Cumulative demand during October was down 7.5 percent.

“Traditionally, sales get a boost in the festival season, but this year the sentiment has been tepid,” Hyundai’s director (marketing & sales) Arvind Saxena said, “We don’t expect any major upswing in the near future as the challenging economic environment is affecting the industry.”

Tata Motors, however, reported a marginal growth of 3 percent in passenger vehicles sales, due to rise in demand for its small cars Nano and Indica even as bookings declined for bigger cars from the Indigo range. Japanese carmaker Toyota Kirloskar Motor, which entered the mass car market last year, posted a 63% growth to 10,762 units, on the back of sales of Etios and Etios Liva models. “Even as the production was low in October due to festive holidays, we have registered a strong growth in sales due to strong demand for our Etios range of cars that is expected to drive growth for us in the coming months,” said Sandeep Singh, deputy managing director (marketing), Toyota Kirloskar Motor.

Utility vehicle maker Mahindra & Mahindra also posted a 10 percent rise in sales to 18,756 units, driven by robust demand from the rural markets.

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