High interest cost continues to dampen automobile sales

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High interest cost continues to dampen automobile sales
High interest cost continues to dampen automobile sales

New Delhi/Mumbai : High interest and fuel cost continued to dampen sales for some Indian automobile companies in January.

On Friday, automobile major Maruti Suzuki India reported a marginal growth in its overall sales, including exports for January which inched up by 0.2 per cent to 151,721 units from 151,351 units sold in the year-ago period.

In the domestic market, it sold 142,150 units last month, up by 1.1 per cent from 140,600 units sold in the corresponding month in 2018.

However, the carmaker exported 9,571 units, registering a decline of 11 per cent from 10,751 units shipped out in the year-ago month.

Similarly, the Hyundai Motor India reported a slight rise in its domestic sales for last month. The sales rose 0.6 per cent for the month of January 2019.

According to the company, the domestic sales rose to 45,803 units from 45,508 units sold during the corresponding period of 2018.

"January 2019 started on a cautious note however Hyundai Motor India registered all model growth on account of strong performance by "All New SANTRO, GRAND i10, ELITE i20, CRETA and Next Gen VERNA," Vikas Jain- National Sales Head, Hyundai Motor India said in a statement.

"The government has announced many people oriented schemes with focus towards rural economy during Interim Budget 2019-20 and we expect this will give positive impetus to the customer sentiments and business environment."

Another auto major Tata Motors' commercial and passenger vehicles sales in the domestic market witnessed a drop of 8 per cent at 54,915 units in January as against 59,441 units sold over year-ago month.

On the other hand, automobile major Mahindra & Mahindra (M&M) reported a 7 per cent rise in its overall sales to 55,722 vehicles in January as against 52,063 units sold in the year-ago month.

"There is buoyancy in rural growth, commodity costs are levelling, fuel prices are coming down and we see improvement in forex movement, which in turn will drive positive customer sentiment," company's Rajan Wadhera, President, (Automotive Sector ) Rajan Wadhera said.

Exports for January 2019 stood at 3,222 vehicles with a growth of 22 per cent.

"Story continues for PV's beginning of this new year with the demand remaining weak in comparison to YOY numbers," said Sridhar V, Partner, Grant Thornton India.

"However a silver lining is evident if one were to look at the sequential numbers which indicates relaxation of the conditions evident in December 2018 in the form of financing constraints, cost of finance and fuel price etc. The budget today brings in hopes over the near term of a better performance."

In the two-wheeler segment -- Honda Motorcycle & Scooter India's domestic total sales in January 2019 stood at 422,177 units which includes domestic sale of 4,00,694 units and exports of 21,483 units.