July witnesses two-digit rise in auto sales

July automobile sales released by the Society of Indian Automobile Manufacturers (Siam) show a growth of 20.8 per cent over the same month last year, the highest such rise till now for the current financial year. A total number of 941,118 vehicles were sold last month. This growth comes from record sales of cars and utility vehicles, which grew by 29.2 per cent, and two-wheelers, whose sales surged by 20.1 per cent last month over the corresponding period last year.

Since April, overall sales of automobiles grew between 9 and 15 per cent, with sales in June peaking at 14.3 per cent. Now comes the July spurt, also made possible from better performance in the medium and heavy commercial vehicles (M&HCV) segment. While M&HCV sales on a year on year basis had dipped by around 35 per cent since April, sales in July moderated to a drop of only 8 per cent. And sales of light commercial vehicles (LCVs) went up.

“Growth in passenger cars has come from four factors. The GDP growth witnessed in the past quarter, new model launches in the passenger vehicle segment, drop in vehicle loan costs, and a low base effect of last year,” says Dilip Chenoy, Director General of Siam. The low base effect refers to the fact that total sales of vehicles for much of 2008 was subdued.

Passenger vehicle sales (cars), aided by new brands like Maruti’s Ritz, Honda’s Jazz, and Tata Motor’s Nano, for the month of July grew by 29.2 per cent. This growth has also come from positive growth in the utility vehicle segment, which has seen robust demand for brands like Mahindra’s Xylo.

A Mumbai-based analyst says the key to growth in the coming months in the passenger vehicle segment will rest on the excitement generated by new car models.

There was, as mentioned, better news on commercial vehicles, too. On the back of positive sales growth posted by the largest truck and bus manufacturer in the country, Tata Motors, and others like Eicher Motors, a total number of 16,138 units of M&HCV units were sold in July, a drop of about 8 per cent against the numbers sold for last year.