New Delhi: Indian’s auto industry continued to shrink in January despite getting rid of inventory in December by offering large discounts.
Commercial vehicles continued to be the worst hit with sales falling 51% to 23,157 units in January from a year earlier, according to data released by the Society of Indian Automobile Manufacturers, or Siam, on Monday.
Car sales in January fell 3.3% to 110,212 from 113,894 units, according to Siam, which reports dispatches by manufacturers to dealers and not retail sales. Two-wheelers were down 3.9% to 581,742 units.
The data produced some good news for manufacturers—the percentage increase in sales between January and December was higher than the year-earlier period. For instance, car sales increased by 27% in January from the previous month; a year ago, the increase was 19%.
“There’s a spurt in month-on-month numbers but it is hard to point to a longer-term trend,” said Vaishali Jajoo, an auto analyst at Angel Broking Pvt. Ltd.
Sales have fallen year on year for six of the last seven months with September being the only exception as manufacturers, expecting sales to pick up in the festive month of October, dispatched more cars to dealers. A slowing economy has prompted buyers to put off purchases even as banks cut interest rates on auto loans from 15.5% six months ago to 11.5%.
January is usually a good month for car companies as buyers tend to put off sales in December due to what the industry terms a “model year change”. Buyers of used cars decide on prices based on the year the car was originally bought and so cars bought only a few days apart but in different months have prices varying by as much as Rs30,000.