February sees spurt in automobile sales

Lower loan rates helped, but analysts unsure if this rise will sustain.

Total sales of passenger cars in India rose in February for the first time in five months, by 22 per cent over January.

However, sales of cars in the year ending this month will be “flat or marginally negative”, said Dilip Chenoy, director-general of the Society of Indian Automobile Manufacturers.

Sales of both cars and motorcycles together, was higher in February by 12.66 per cent over the same month last year, at 836,926 units as against 742,856 units.

Maruti Suzuki, the market leader in the car segment, saw sales rising 19 per cent in February, while those of its prime competitor, Hyundai Motors, grew by 45 per cent. Both firms were riding strong on models like SX4, Swift DZire, A-Star, i10 and i20, which have seen strong demand since their launches.

Tata Motors, the third-largest in car sales, had a 15 per cent gain.

Overall car sales had declined for four months starting October due to the general economic slowdown.

Two-wheeler sales also saw a jump, with a growth of 15.6 per cent in February, to 491,462 units. The top two-wheeler maker, Hero Honda, led the rise. Bajaj Auto was the only company which saw a fall in sales during the month.

The entire two-wheeler industry, comprising motorcycles, scooters, mopeds and electric two-wheelers, posted a growth of 16.23 per cent in the year ending February, at 630,849 units as compared with 542,757 units during February last year.

A primary reason behind the February growth is speculated to be fresh vehicle dispatches from manufacturers to dealers, done in a restricted manner in earlier months. Besides, analysts say, the improved finance availability, due to cuts in interest rates by banks, have propelled growth.

Maruti Suzuki says at least four-fifths of all car purchases in India are done on credit.

Says Surjeet Arora, analyst, Prabhudas Liladhar: “Many automotive companies had tied up with banks to help bring back liquidity in the market. This has most certainly helped automotive companies to encourage purchases. However, growth after March will be subdued as the pent-up demand of November and December will be or has already been met in this quarter.”

However, due to falling demand for medium and heavy duty trucks, the commercial vehicle segment posted a disappointing total once again. The segment saw a fall of 31.7 per cent, at 31,069 units during February, as compared with 45,478 units in the same month last year.