Feb car sales vroom on fear of price rise

Car manufacturers led by Maruti Suzuki and Hyundai Motors recorded their best-ever monthly performance in February, with consumers flocking to showrooms to avoid all possibility of a price increase, expected in the Union Budget presented at month-end.

Collectively, sales of eight companies surged 31 per cent to 160,297 units during February, compared with 122,353 units sold in the same month a year earlier. The record growth for all the companies took place despite the month having two to three days less than the average one.

Maruti Suzuki, India’s biggest car maker, sold 84,765 units during February in the domestic market, an increase of 20 per cent over the same month last year, when the company sold 70,625 units.
 

FEAR GEAR
Company	February’09**	February’10	Growth%
Maruti Suzuki	70625.00	84765.00	20.02
Hyundai Motors	21215.00	31001.00	46.12
Mahindra	14720.00	18280.00	24.18
General Motors	4921.00	11111.00	125.78
Honda Siel	5579.00	6275.00	12.47
Toyota	2976.00	5993.00	101.37
Fiat	1309.00	2335.00	78.38
MRPL*	1008.00	537.00	-46.72
Total	122353.00	160297.00	31.01
*Mahindra Renault Pvt Ltd                                 **Domestic sales

The previous monthly best for the company came in January, when it sold 81,087 units. Additional volumes from the Ritz and Eeco, which were not there in the previous years, along with sustained demand for the Swift and DZire, pushed the numbers.

R C Bhargava, chairman, Maruti Suzuki, said: “The fundamental demand is quite strong and we do not see any significant impact of the excise hike even immediately. The government’s strong emphasis on the rural sector and revision of tax slabs will generate demand. In addition, banks are also not holding back finance to the sector, which has helped pushed volumes even after the festive season.”

Korean brand Hyundai Motor India, too, recorded its highest-ever monthly sales at 31,001 units in the same month, recording an increase of 46 per cent over the 21,215 units sold in the same month last year. Models like i10, i20 and the Santro led the rise in volumes for the company.

Arvind Saxena, director-marketing and sales, Hyundai Motor India, said: “The sales continue on a strong pitch, as we have seen a lot of preponement of buying. The two per cent hike in excise duty which was subsequently levied might result in a correction in demand in the short run.”

Sales of US-based General Motors grew 126 per cent to 11,111 units from 4,921 units a year earlier, on the back of new models such as Cruze and Beat.

“The trends are looking very buoyant and we do not see much impact of the excise hike on sales. We launched two new cars (Beat and Cruze) recently, which are having very good demand. Besides, the Spark is also shoring up overall volumes. We will continue to go strong this month and next,” said a senior executive from General Motors.

The Beat, the new compact car, replaced the Spark as the flagship car of the company, recording sales of 4,431 units as against 3,412 units of the latter.

Utility vehicle major Mahindra & Mahindra posted a growth of 24 per cent to 18,280 units in the domestic market, as against 14,720 units recorded in the same month a year earlier. Improved demand for vehicles such as Xylo, Scorpio and Bolero helped the company lift overall sales. The company passed on the excise hike to its consumers.

Japan’s Honda and Toyota also recorded robust demand for its models. Toyota sales grew 101 per cent to 5,993 units, from 2,976 units. Innova, the multipurpose vehicle, led the growth.

Sales of Honda Siel Cars India, the Indian subsidiary of the Japanese auto giant, grew by 12 per cent to 6,275 units, as compared to 5,579 in the month a year earlier. The company sold 5,076 units of the City sedan during the period.

Mahindra Renault, which sells the Logan sedan, was the stand out company again, with sales dropping to 537 units as against 1,008 in February 2008, as demand for the European car continued its downward trend.