The automobile industry signed off 2008 on a dismal note as domestic sales in December continued to slide despite a 4 per cent cut in excise duties earlier in the month.
Car market leader Maruti Suzuki registered an 11.2 per cent fall in car sales for December 2008 over the same period last year, following declines of 8 per cent and 27.4 per cent in October and November, respectively.
To help the industry wriggle out of the slowdown, excise duties were reduced on December 7. Clearly, the cuts have not had the desired effect on sales. Last week, Maruti had indicated that despite the price cuts that followed the excise rebate, its impact on consumer demand was still to be felt.
General Motor's domestic sales too slid by 36 per cent during the month and the company missed its growth target for 2008 as well. “Since the market has slowed down completely we could not meet our target although we have registered a marginal growth of 9.5 per cent,” said P Balendran, vice president, GM India.
The spark was missing in the two wheeler segment as well. Market leader Hero Honda reported a 10.2 per cent decline in December, its first double digit fall in 17 months. The company expects sales to remain under pressure in the new year.
“While the government's stimulus package has resulted in lowering of prices of two wheelers, the industry may see further slowdown if high financing rates and liquidity crunch continue,” said Anil Dua, senior vice president (sales and marketing), Hero Honda.
Second placed Bajaj Auto Ltd also reported a 32.7 per cent dip in sales during the month, in line with 34 per cent and 37 per cent fall in October and November. Bajaj blamed high inventories for the bad numbers.