Know what’s bothering Maruti and General Motors in India

Automobile makers in India are seeing red. Lower petrol prices and lower interest rates didn’t seem to benefit car sales over the last few months. On the contrary, sales of automakers across the category took a hit in the month of March. However, the badly bleeding automobile sector is expected to pick-up sales in FY16 due to a favourable macro environment.


According to a news report, General Motors India today reported 35.5 per cent decline in sales at 4,257 units in March as against 6,601 units in the same month last year.

"Despite the marginal reductions in repo rates earlier this year, the green shoots are still not visible in the economy as we haven't really seen the banks passing on the reductions entirely to consumers," General Motors India Vice President P Balendran has told the ET.


As per the ET report, shares of India’s largest car manufacturer were the top loser on the BSE Auto Index and were down 2.62 per cent in intraday trade after the company reported sharp decline in sales for the month of March.

Maruti has been focusing on method to reduce cost of production and passed on the benefits to consumers. Yet, passenger car sales declined 0.3 per cent year-on-year to 85,733 units, hit by lower compact car sales and flat growth in mini cars business.


"There could be a little bit of a slowdown for auto sector. It has kind of been toppish for the last two-three months now except for spark here and there. Maruti could show better numbers than the others," Prakash Diwan, Director, Altamount Capital has told the financial daily.

(Image: Reuters)