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| Car Sales |
Sales in the year ended March 31 surged 30% to 1.98 million units from 1.53 million, according to data issued by the Society of Indian Automobile Manufacturers. That is the biggest percentage gain since a 60% increase in the year through March 2000, said Sugato Sen, a senior director of the automotive industry lobby group.
Introductions of new models by existing and new auto makers, easier availability of low-cost loans as well as rising personal incomes in an expanding economy have encouraged more people to buy new cars and sport-utility vehicles in the south Asian country. But rising loan rates, higher fuel costs as well as increases in vehicle prices are likely to dampen growth in the year that started April 1.
"It is difficult to maintain such high growth rate of last fiscal [year]. The increase in interest rates and commodity prices is also a concern," said Pawan Goenka, SIAM's president. "The ability of the industry to absorb high raw material cost is lower than last year and this will lead to some price revision," he said.
SIAM is forecasting local car sales to grow between 16% and 18% in the financial year that began April 1.
Local auto makers including Maruti Suzuki India Ltd., Mahindra & Mahindra Ltd. and Tata Motors Ltd. have already raised prices twice since January, citing higher costs of raw materials such as steel, natural rubber and aluminum.
Sales of Maruti Suzuki, the country's largest car maker by sales, increased 26% in the past year to 966,447 cars. Second-ranked Hyundai Motor Co. posted a 14% rise to 358,904 cars, while sales of Tata Motors rose 27% to 256,202 cars.
Sales in the past year also received a help with the introduction of several models such as Ford Motor Co.'s Figo, Volkswagen AG's Polo and Vento as well as Toyota Motor Corp.'s Etios that received good response from customers.
In the past year, local sales in the motorcycle segment increased 23% to 9.02 million with market leader Hero Honda Motors Ltd. recording 15% growth to 4.3 million units. Second-ranked Bajaj Auto Ltd. posted a 36% increase to 2.41 million motorcycles, while sales at TVS Motor Co. rose 28% to 632,150 motorcycles.
The scooter segment posted a 42% increase to 2.07 million units in the just-ended financial year. The gain was helped by higher sales of Honda Motorcycle and Scooters India, TVS Motor and Suzuki Motorcycle India Pvt. Ltd.
Local sales of trucks and buses grew 27% to 676,408 units as companies such as Tata Motors, Ashok Leyland Ltd. and Mahindra recorded rises.
Local truck and bus sales at Tata Motors grew 22% to 393,145 units, while those at Ashok Leyland rose 45% to 83,799 units.
Mr. Goenka said SIAM expects a moderation in demand for two-wheelers and cars due to a revision in prices, high inflation and rising interest costs to bring down growth in total vehicle sales in the current financial year to 12%-15%. They rose 26% in the just ended year to 15.51 million units.
Auto analysts expect soaring cost of fuel to also slow down the pace of sales growth. "Hikes in product prices and increased fuel price along with higher interest rates would be the major headwind that could impact the performance of companies," Yaresh Kothari, an analyst at Angel Broking, said in a recent report.
SIAM expects growth in scooter and motorcycle sales to slow to 12%-14% from last financial year's 26%, while sales of trucks and buses to grow 14-16%, compared with 27%.
Sources: http://online.wsj.com
