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Diesel models drive up car sales

autos Updated: Aug 09, 2012 23:48 IST
HT Correspondent

Domestic passenger car sales grew by 6.7% to 143,496 units in July 2012, the ninth consecutive month of sales growth, even as concerns of an impending downturn dampened the industry.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), total sales volume across categories registered a growth of 7.5% to 1,446,959 units in July 2012 as against 1,345,644 units in the same month of 2011.

The low base from last year, when market leader Maruti Suzuki had faced labour unrest at its Manesar factories, and high demand for diesel utility vehicles, propped up car sales.

The factories are under lockout since July 21 after violence on the shop floor three days prior to it but the effect would be visible from August onwards.

"Car sales are growing mostly due to diesel models, which have also started seeing moderation in demand except for one or two models," said Vishnu Mathur, director general, SIAM. http://www.hindustantimes.com/Images/Popup/2012/8/10_08_12-buss25d.jpg

"There is nothing positive which has happened last month to spur growth, except for slight moderation in petrol prices. Otherwise, interest rates remain high and consumer sentiments are down."

The bigger concerns lie in segments beyond cars. Sale of commercial vehicles, often seen as a barometer of the domestic economy, was almost flat as growth fizzled out over the last few months.

Sales grew by only 1.2% last month to 65,008 units from 64,234 units in the year-ago period.

Similarly, two-wheeler sales, which comprise the bulk of all automobile sales around the country, are also witnessing a slowdown in demand.

Total two-wheeler sales in July 2012 increased by 7.5% to 1,132,696 units from 1,054,120 units in the same period of the last fiscal year, but motorcycle sales last month grew at a slower 4.9% to 8,21,821 units from 782,852 units year-on-year.