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Car, mobikes cruised along in March; CVs wobbled

BS Bureau

Despite a good showing by Tata Engineering, Fiat, Honda Siel and General Motors, car sales grew by only around 3.6 per cent as a result of a 6.8 per cent decline in sales by market leader Maruti and an almost flat growth by the number two player, Hyundai.

Sales of commercial vehicles, a good indicator of economic growth, however, went down by 2.4 per cent to 18,642 units (19,108 units in the year-ago month).

Total car sales rose for the sixth successive month to 65,147 units from 62,886 units in March 2001, according to data released by the Society of Indian Automobile Manufacturers.

Sales during 2001-02 was almost flat at 570,00 cars against 567,000 units in the year-ago period, the data showed.

The performance of multi-utility vehicles category was also dismal, with sales dropping as much as 13.9 per cent at 13,023 units (15,130 units).

In two-wheelers, motorcycles continued to ride high, clocking a 37.8 per cent growth at 290,000 units (210,000 units). However, sale of scooters fell by 17.7 per cent at 63,936 units in March 2002 (77,697 units).

Sales of mopeds were also lower by 19.6 per cent at 38,919 units (48,442 units) while that of three-wheelers jumped by an impressive 54.8 per cent to 19,096 vehicles (12,335 units).

Maruti Udyog's car sales fell by 6.8 per cent in March 2002 to 34,727 units (37,265 units in the year-ago month), while Hyundai Motor India posted a flat growth selling 9,513 cars (9,509 units).

Sales of Tata Engineering, maker of the 'Indica', surged ahead by 65.9 per cent at 8,769 cars (5,284 units). Commercial vehicle sales dropped in March 2002 due to a flat growth in the medium and heavy vehicle segment coupled with an 8 per cent drop in sales of light commercial vehicles.

Sale of M&H vehicles stood at 12,157 units (12,058 units), but that of LCVs were lower at 6,485 units (7,050 units). This can be attributed to a drop in sales of market leader Tata Engineering in both the segments. policy.

Other stipulations in the draft policy will, however, help the CERC in encouraging efficiency. For instance, the draft policy says tariff determination should encourage efficiency gains and better performance through higher returns.

Among other things, the draft says the principles of a common minimum action plan for raising the minimum tariff to cover 50 per cent of the cost of supply in three years need to be implemented at the earliest.

Tariffs should emerge through a competitive process, it says. Tariff-based bidding should be the route for the development of new power projects in the private sector, the draft adds.

Where tariffs are not determined through a competitive process, these will have to be determined by regulatory commissions as provided for in the ERC Act, 1998, it points out.

The policy says regulators may choose between return on equity and return on investment. The draft also calls for the need to move towards a regime of pre-tax returns rather than post-tax returns so that efficient tax management is encouraged.

The rate of return needs to have a correlation with interest rates and the bank rate and should take into account the differences in the gestation period of investments in hydro, thermal, transmission and distribution projects.

A higher rate of depreciation may be permitted by regulators if the higher provisions sought are to be fully utlitised, the draft says.

A differential tariff for peak and off-peak hours may be introduced to flatten the load curve, it adds.

Distribution tariffs should move towards a multi-year performance target to encourage efficiency gains and to reduce transmission and distribution losses.

A higher rate of return in the initial transition period for private distribution companies to encourage tackling of distribution losses will be justified, the draft policy has said.

As required under the objectives laid down by the Electricity Regulatory Commissions Act, 1998, a group had been constituted by the power ministry to prepare a concept paper on the tariff policy for the power generated by the central public sector undertakings.

The draft was being circulated among various stakeholders in the sector and the final policy was expected in about a month's time, officials said.

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