Car sales in India fell for a record eighth month in row in June with a dip of 9 per cent as economic slowdown and low consumer sentiments continue to hit demand, prompting industry body SIAM to seek stimulus package for the automobile sector from the government.
With actual sales in the first quarter of this fiscal turning out to be wide off the mark from what it had forecast in April, Society of Indian Automobile Manufacturers (SIAM) stayed away from revising sales projections it had made in April this year and stated that even those targets were unlikely to be met, except in two-wheeler segment.
According to the latest figures, domestic car sales stood at 1,39,632 units in June as against 1,53,450 units in the same month last year.
"The slow economic growth, high interest rates and fuel prices, high inflation are all affecting consumer sentiments. Government needs to have a re-look and bring a stimulus package for the auto industry which will help in achieving higher growth," SIAM President S Sandilya told reporters here.
SIAM is looking at the a stimulus package similar to the one given during the 2008-09 downturn, in which excise duty on two-wheelers, small cars and commercial vehicles were reduced to 8 per cent, SIAM Director General Vishnu Mathur said.
He, however, said the industry body has not yet approached the government for the same.
In June, market leader Maruti SuzukiBSE -3.58 % India posted 8.17 per cent decline in domestic sales at 65,172 units as against 70,977 units in the corresponding month last year.
Hyundai Motor India Ltd posted a marginal increase in car sales to 30,577 units from 30,363 units in June last year, while Tata MotorsBSE 2.31 % had a decline of 29.17 per cent to 9,628 units from 13,595 units in the same month last year.
Homegrown major Mahindra & Mahindra posted 17.17 per cent decline in its utility vehicle sales at 15,916 units from 19,348 units in June last year.
"Utility vehicle sales have been affected by hike in excise duty to 30 per cent from 27 per cent announced in this year's Budget," Mathur said, adding that high cost of ownership has also deterred buyers of entry level segment cars.
On the forecast, Sandilya said in the April-June period this fiscal, domestic car sales declined by 10.41 per cent as against 3-5 per cent increase forecast in April. Similarly, two-wheeler sales also dipped by 0.82 per cent against a forecast of 6-8 per cent, commercial vehicles were down by 8.12 per cent against a projected growth of 7-9 per cent.
"In such a volatile scenario, we thought it doesn't make a sense to give a revised forecast now," he said, adding it was unlikely that the growth projection made in April would be met in almost all the segments this fiscal, except two-wheelers.
Honda Cars India on Tuesday launched new variants of its small car Brio with some upgrades, including driver seat height adjuster and rear windshield defogger, as an additional safety feature.
Both these features were found to be among the most desirable features in the Brio based on the customers' feedback, the company said.
The Honda Brio will be available in all 6 variants — EMT, EXMT, SMT, VMT, VXMT and VXAT — priced at Rs 4.12 lakh to Rs 6.12 lakh (all ex-showroom Delhi).
"Brio is a significant model for Honda in India as the car added more than 32,000 customers in the last fiscal. It is our endeavour to study customers' needs and aspirations and introduce features that enhance the overall ownership experience," Jnaneswar Sen, Senior Vice-President, Marketing and Sales, Honda Cars India, said.
The car comes with 'Honda Care Maintenance Package' for free periodic maintenance service up to 40,000 km or two years whichever occur first. Customers can buy this package for Rs 9,996.
Powered by a 4-cylinder 1.2-litre i-VTEC engine, the Brio gives fuel economy of 19.4 km/litre for manual transmission and 16.5 km/litre for automatic transmission, as per test data, the company said.
Escorts Ltd, one of the oldest manufacturers of agriculture and infrastructure equipment, has said the company will focus on premium tractors. To start with, it plans to launch a premium tractor in 2015.
Code named IVR3, this would be one of its kind tractor, which the company says will be an agriculture-solution with a mix of software technology and machineries. This will be a heavy duty tractor with 55 brake horse-power and above.
"In the last two-three years, lot of work has happened on what kind of technology we can bring in around the crop that we sow and seeds which have been growing across the country," Nikhil Nanda, Joint Managing Director, Escorts, told Business Line.
The company is in talks with around 12-15 global companies (mostly from the European region) for technology collaborations. There are a few pilot projects or experiments already going on with some of these companies in southern India and the results have been good, he said.
"We are talking about solutions for the whole agriculture means – from the time of sowing the seeds to harvest – end-to-end solutions in terms of bringing the value to the farmers," Nanda said.
For example, he said, there are such technologies in Korea where if there is a need of 100 litres of water to irrigate a field, such machines are making it possible to use only 20 litres of water. Therefore, such technologies would help Indian farmers, especially in drought-hit areas or where there is scarcity of water for irrigation.
However, these premium tractors would be expensive than what are available in the market today, he said adding that price has to be high because these will be high-end products just like BMWs, Audis and Ferrari's of the cars market.
"We will not be called as a tractor manufacturing company, but an agriculture solutions company in the future with these premium products," he said.
Escorts has more than 45 variants of tractors starting from 25 to 80 horse power. It currently sells three brands of tractors – Powertrac (priced at Rs 3.75-6.5 lakh), Farmtrac (priced at Rs 4.5-8 lakh) and Escort (in limited States) priced around Rs 3 lakh.