New Delhi: As rising fuel prices and interest rates dampened customers’ purchasing spirits, domestic passenger car sales posted the slowest growth in 24 months in May this year at 7 per cent.
Car sales in the country stood at 1,58,817 units in May, 2011, as against 1,48,425 units in the same month last year, according to figures released by the Society of Indian Automobile Manufacturers (SIAM) on Thursday.

"This is the slowest growth rate since May, 2009, when the increase was just 2.77 per cent," SIAM Senior Director Sugato Sen told reporters here.

"In retail sales, there are some bottlenecks like higher interest rates, non-availability of finance, rising fuel prices and higher prices of vehicles. The sentiment in the market is not very positive and next month, we expect this to reflect in the sales numbers," Sen said.

NBFCs biggest worry

"One of the biggest worries is that RBI has changed the specification of the NBFCs. Now NBFCs cannot provide loans for purchasing non-transport vehicles, which are personal
vehicles. They won't get the priviledge of re-finance from banks. This will hurt the industry severely," he said.

Under these circumstances, he said it is unlikely that the passenger car sales forecast for the fiscal would be achieved.

SIAM had projected a growth of 16-18 per cent in passenger car sales for the 2011-12 fiscal, while the overall industry was expected to grow by 12.15 per cent.

Gain some lose some

During the month, Maruti Suzuki India posted just a 0.99 per cent increase in domestic car sales to 76,874 units, while that of rival Hyundai Motor India Ltd was 14.18 per cent at 31,001. Tata Motors saw a decline of 12.56 per cent in sales to 16,280 units during the month.

According to SIAM, total two-wheeler sales, however, increased by 14.49 per cent last month to 10,72,287 units from 9,36,555 units in May, 2010.

Motorcycle sales grew by 14.33 per cent during the month to 8,29,255 units from 7,25,311 units in the corresponding month last year.

Hero Honda continued its impressive performance with a 13.54 per cent increase in sales to 4,55,662 units. Rival Bajaj Auto also posted a 13.87 per cent increase to 2,18,321 units during the month, while Honda Motorcycle and Scooter India (HMSI) saw its bike sales grow by 10.2 per cent to 60,733 units.

Chennai-based TVS Motor Co saw its motorcycle sales increase by 5.42 per cent to 55,154 units during the month.

Scooter, three-wheeler sales up

The scooters segment witnessed a growth of 11.21 per cent in sales during May this year to 1,75,160 units from 1,57,509 units in the same month last year.

HMSI's scooter sales during the month were down 2.56 per cent to 75,012 units, while that of TVS Motor Co grew by 17.13 per cent at 35,803 units. Hero Honda's scooter sales during
the month grew by 24.10 per cent to 29,460 units.

Three-wheeler sales during May grew by 8.6 per cent to 35,991 units, as against 33,140 in the same month last year.

Sales of commercial vehicles jumped by 16.16 per cent to 56,314 units from 48,479 units in the year-ago period.

"In the CV segment, LCVs are having good growth. But M&HCVs have slowed down and this is a worry area, as it shows slowing down of the economy," Sen said.

Light commercial vehicles sales grew by 22.9 per cent to 31,451 units from 25,590 units last year. Medium and heavy commercial vehicle sales stood at 24,863 units as against 22,889 units in May last year, up 8.62 per cent.