Domestic car sales dip 2nd month in row, down 4.21% in February

New Delhi: Car sales declined for a second straight month, posting 4.21 per cent dip in February, as Jat quota stir, inventory adjustment by some firms and postponed purchases in expectations of a price cut after the Budget affected demand.

According to the data released by the Society of Indian Automobile Manufacturers (Siam), domestic passenger car sales stood at 1,64,469 units in February as against 1,71,703 units in the same month last year.

"Jat agitation had an impact on the industry, especially on market leader Maruti Suzuki's dispatches. Moreover, there were inventory corrections by some of the auto manufacturers," SIAM Deputy Director General Sugato Sen told PTI here.

He further said: "Also, some of the dealers didn't pick up stock ahead of the Budget as they were expecting some reduction in excise duties that would have affected prices differently."

Although in the Budget, instead of reducing excise duties on passenger vehicles, an infrastructure cess of 1-4 per cent was imposed on different categories of automobiles, besides collection of tax at source at the rate of 1 per cent on purchase of luxury cars exceeding Rs 10 lakh.

Snapping a 14-month growth streak, car sales in India had declined in January to 1,68,303 units compared with 1,69,527 units in January last year.

In February, market leader Maruti Suzuki India saw its domestic car sales decline by 3.94 per cent to 87,149 units as against 90,728 units in the same month last year.

Rival Hyundai Motor India Ltd (HMIL) also witnessed a decline of 12.7 per cent at 32,442 units last months as against 37,163 units in February last year.

Honda Cars India's domestic sales also dropped by 15.61 per cent to 12,713 units compared with 15,065 units in the year-ago month. Tata Motors' car sales were at 9,284 units in February, as against 11,637 units last year, down 20.21 per cent, Siam said.

Homegrown utility vehicles major Mahindra & Mahindra, however, posted a growth 26.99 per cent in its domestic sales at 22,612 units as against 17,805 units in February last year.

Total two-wheeler sales in February rose 12.76 per cent to 13,62,219 units as against 12,08,084 in the year-ago period.

Motorcycle sales last month jumped 11.05 per cent to 8,59,624 units, from 7,74,122 a year earlier.

"There is a rebound in the motorcycle segment. We are seeing the rural market coming back slowly and the various measures announced in the Budget for farm sector and infrastructure should help improve the demand," Sen added.

As per Siam data, market leader Hero MotoCorp saw its motorcycle sales grow by 10 per cent at 4,48,772 units in February as against 4,07,809 units in the same month last year.

Rival Bajaj Auto also saw motorcycle sales zoom 30.47 per cent to 1,51,141 units compared with 1,15,840 units in the same month last year.

However, Honda Motorcycle and Scooter India (HMSI) had a decline of 12.29 per cent at 1,22,108 units as against 1,39,233 units in February last year.

The scooter segment witnessed a growth of 17.71 per cent at 4,36,163 units in February as against 3,70,527 units in the year-ago month.

Market leader HMSI registered a growth of 9.94 in scooter sales in February at 2,29,316 units as against 2,08,573 units in the corresponding month last year.

Hero MotoCorp scooter sales also posted a growth of 30.71 per cent at 88,156 units as against 67,442 units in the same month last year.

Chennai-based TVS Motor Co also posted a growth of 18.58 per cent at 64,815 units as against 54,655 units in the same month last year.

Siam said sales of total commercial vehicles increased 19.93 per cent to 62,359 units as against 51,998 in the year-ago month.

Vehicle sales across categories registered a growth of 11.76 per cent at 17,03,688 units in February compared with 15,24,395 in February 2015, it added.