HomeIndustry NewsCar dealers blame AP's sluggish economy for poor Sales in state

Car dealers blame AP’s sluggish economy for poor Sales in state

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Vehicle sales in Andhra Pradesh registered lackluster numbers when compared to the national average for the first 2 quarters of this fiscal i.e. April to Sept. 2022.

As per industry insiders’ sales of two wheelers, passenger cars and commercial vehicles all registered lower numbers when compared to the national average.

In fact two wheeler sales recorded negative growth in the state of Andhra Pradesh for the first two quarters of FY23 compared to the same period last year while car sales grew but far below the national average growth rate.

Andhra Pradesh saw its car sales grow by just 8% when compared to the national year- on- year growth of car sales (PV) of an impressive 21%.

Most of the car dealers in the state attributed these dismal sales numbers to sluggish economic growth in Andhra Pradesh along with dampeners like hike in the registration fees, rising interest rates on loans and weak buyers’ sentiment.

Industry players said the market has largely “shrunken” to a new low bringing in lesser foot falls.

“No new jobs have been created and no new industry or projects are coming up. When the economic scenario is like this, how do you expect the car industry to do well? This negative growth is only a spinoff of the abysmal state of the economy, which the state is reeling under” said Mr V Prabhu Kishore, Chairman of Varun group, one of the pioneer car dealers of Maruti Suzuki in the state.

Concurred Mr K Rama Mohana Rao, Chairman of Lakshmi group that runs dealerships of Hyundai cars and said that industrial growth and employment generation has been affected, and vital sectors including cars, real estate and manufacturing have fallen substantially.

“Poor consumer sentiment & shifting priorities with little disposal income in consumers’ hands, is affecting car sales figures” Mr Rao said”.

Both these leaders added that consumers and car dealers have also been burdened with the added hike in registration fees, life tax and the growing interest rates on car loans thereby significantly affecting demand.

According to Mr Rao, in a price sensitive market like India, only mid segment cars in the price bracket of 10 to 12 lakhs bring in big business for the car industry, and they account for a good 30% share of all car sales.

Mr. Srinivas, General Manager Lakshmi Kia dealership noted that albeit demand for new cars was good right after the Covid-19 pandemic, but it has not been so in the first two quarters of this fiscal. He said that tier-2 cities like Vizag have suffered.

Kia’s Srinivas claims a market share of 22% in AP. “We expect the market to shift to better buying days, sooner than later. The EV6 model, an electric car from our garage, is doing well nationally, but there is little demand for it in AP” added Mr Srinivas.

Maruti losing Market Share in AP

With fierce competition Maruti- Suzuki, is said to be fast losing its pre-eminent position to its competitors such as Hyundai and Tata Motors. ‘Our market share has shrunken to around 41% from the earlier 50%. This may be due to the lack of SUVs from our company. But now we have come up with Maruti Vitara, a mid-size SUV, and plans are afoot to launch some more’ informed Mr Kishore.

He further informed that across his dealerships in AP, Telangana and Karnataka sales figures hovered around a combined 4000 units out of which AP did a mere 1,200 units with Vizag selling only 700 cars.

Luxury car sales too take a Dent

Mr M Parthasarathy, General Manager of Audi dealership said that October which is a Dussehra, a festival month used to bring in good sales numbers in the previous years, but, this year for the first time ever we sold lesser cars, which brought in bad sales figures.

“We sold less cars in the first two quarters through our three showrooms in Hyderabad, Vizag and Vijayawada’ Mr  Parthasarathy said.

Similarly arch rival BMW numbers too have slowed in the state.

Mr. Bibekananda Sahoo, GM, BMW dealership, Vizag said “The sales have been very much affected and it is a bit slow in Andhra Pradesh. There is little consistency in the market” said Vivek and cited second quarter and October sales to be lackluster.

 

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