Auto Firms In Reverse Gear
Binu / 02 Jul 2012
Its commercial vehicle (CV) sales grew by 4 per cent in the domestic market to 41,026 from 39,272 vehicles in June 2011. This was driven mainly by the sales of light commercial vehicles which saw a robust growth of 22 per cent. Lately, demand for the medium and heavy commercial vehicles has been plummeting due to slow industrial and manufacturing growth. The segment sales declined by 21 per cent in June 2012 to 12,663 from 16,074 sold in June 2011.
In the CV space, Tata Motors and Ashok Leyland currently account for about 85 per cent of the market share. The market share has been stagnant these days and holding on to it should be a more difficult task than earlier with the entry of new players like Daimler, Mahindra Navistar, Volvo, Scania AB and Bharat Benz. These firms have been showing growing volumes since their inception.
Passenger vehicles were the hardest hit due to high petrol prices and interest rates and stood at 17,244, lower by 22 per cent over June last year. In passenger vehicles, the only segment that witnessed growth was of utility vehicles which was 5 per cent higher than last year for June. Companies like Toyota Kirloskar and Mahindra & Mahindra have been able to grab this opportunity and drive overall their sales to new highs. They saw volume growths of 22 per cent and 16.2 per cent respectively. These figures were a result of models like Innova and Fortuner by Toyota and XUV500 by Mahindra & Mahindra.
Even two-wheeler sales have been disappointing for the month of June 2012 with Bajaj and TVS seeing dips of 1.38 per cent and 7.54 per cent respectively. The stock of TVS is down by close to 3 per cent and Bajaj Auto is seen trading by more than 1 per cent lower. The stock price movements have reversed for these companies after the short rally these stocks saw after a petrol price cut on Friday. Petrol prices and interest rates will continue to define the demand of this sector and decide the dynamics of future movement.
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