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| Car makers revise targets after surprise growth |
| Danny Goodman / New Delhi Sep 08, 2009, 01:16 IST |
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Aim at double-digit sales growth for the current financial year
Passenger vehicle manufacturers are hopeful of achieving a double-digit sales growth for the current financial year. Earlier, the sales outlook for cars and utility vehicles was pegged at 5-6 per cent for 2009-10 by the Society of Indian Automobile Manufacturers (Siam).
One reason for the upward revision in the forecast comes from the surprise growth of 9.45 per cent notched by the industry since the beginning of this year.
“The surge in growth for this year comes primarily from the low base posted by the industry last year. For the whole industry, I expect growth to be in the high single-digits,” said Pawan Goenka, president of Siam and president of Mahindra & Mahindra (M&M). Last year, the industry grew 0.13 per cent.
Maruti Suzuki, which sold 733,000 units of cars last year, is hopeful of clocking more than 800,000 units this year. “We should reach 800,000 unit sales this fiscal and that is our target. We hope to grow by 10 per cent,” said Shinzo Nakanishi, CEO & managing director. Last year, the company grew by less than 2 per cent. Domestic sales for July and August have been well over 25 per cent.
Hyundai Motor India (HMIL), the largest exporter of cars, is hopeful of clocking double-digit growth in the domestic market for the current year. Between April and July this year, the company’s domestic sales grew 11 per cent. “We feel the market will get better during the coming festival season. That will help us clock better volumes. We will post double-digit growth this year,” said Arvind Saxena, senior vice president (marketing & sales) of Hyundai.
M&M, which saw 2.5 per cent growth last year, also expects a double-digit growth for the current year. The new found confidence comes on the back of good demand for its utility vehicle, Xylo, launched this year. “We expect to have double-digit growth in our passenger vehicle segment this year,” said Rajesh Jejurikar, chief of operations (automotive sector) of M& M.
Even manufacturers of premium cars like Honda Siel, which posted negative growth of 17 per cent last year, are hopeful of turning around this year with double-digit growth. “We are expecting our sales (growth) to be in double-digits for the current financial year,” said Jnaneswar Sen, senior general manager (marketing) of Honda Siel. April to July car sales for the company this year grew 7.4 per cent.
Fiat India, which launched its fourth compact car, the Palio, in the domestic market this year, is hopeful of maintaining its current monthly volumes till next year. “Currently, we sell around 2,500 cars, comprising both the Linea and the Punto, in the domestic market. We expect the monthly numbers to grow to 3,000 units soon,” said Rajeev Kapoor, CEO.
Analysts say the expected growth of around 10 per cent for this year comes from five reasons. “The industry will continue to grow on the back of new models, which is expected to come from Tata Motors (new Indigo), GM (the Beat concept compact car), and Ford’s new small car next year,” said a Mumbai-based analyst. Maruti’s new models like the A-Star and Ritz have generated good sales volumes. Two, the three stimulus packages announced by the government beginning last December have pulled consumers to showrooms. Three, the attractive car loans at 8 per cent offered by public sector banks like SBI and four, the growth in rural markets.
“What we have found out is that the rural economy has been untouched by the continuing credit crisis which plagued the urban markets the whole of last year,” said Shashank Srivastva, chief general manager (marketing) of Maruti Suzuki. Rural markets contribute around 12 per cent to the company’s total sales.
The other reason for the expected double-digit growth are sales from export markets. “Despite key markets in Europe nearing the limits of the vehicle-scrapping incentives, we expect to maintain the volumes for the coming months,” said Saxena. Last year, Hyundai exported 253,345 cars from India.
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