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Mixed Show

In 2011, the automobile sector faced the biggest decline in the sale of passenger cars in over a decade

For companies in the BSE Auto index, Q2FY12 spelled bad news: sales growth rose 20.23 per cent but profit growth declined 12.74 per cent (y-o-y).

Domestic car manufacturers have hit the speed bump. In October 2011 sales of passenger vehicles declined 23.8 per cent — the biggest such decline in a decade. High interest costs and fuel prices have taken their toll both on sales and margins. India’s largest car manufacturer, Maruti Suzuki, which faced disruption in production following labour unrest, saw its volumes fall 53 per cent (y-o-y) in October 2011.

Some segments have escaped the carnage. Commercial vehicles’ sales were up 18.53 per cent (y-o-y). Light commercial vehicles’ (LCVs) sales grew 15.34 per cent while medium and heavy commercial vehicles (M&HVs) were up 22.91 per cent. Tata Motors saw its CV segment grow 12.78 per cent (y-o-y). Its medium and heavy vehicles (M&HV) and LCV segments too have been doing well: this segment grew 23 per cent in October.

Utility vehicles (UVs) have been selling well too. Tata saw 23 per cent increase in sales in this segment while M&M saw 19 per cent growth in October 2011. Maruti lagged in this segment too with sales down 36 per cent.

The two-wheeler segment is holding up well. Two-wheeler sales increased 2 per cent (y-o-y) in October 2011. Motor cycles sales were flat at 0.7 per cent while scooter sales picked up 12.2 per cent y-o-y. As for industry leaders, Hero MotoCorp reported sales growth of 1.32 per cent while Bajaj Auto saw sales rise 6.6 per cent y-o-y.