New compact car models boost sales

Maruti Suzuki - the country's largest car manufacturer - posted an increase
of  15 per cent in domestic sales selling 64,143 units against the 55,952
units it sold in May last year while Hyundai Motor India posted a 47 per
cent surge in domestic passenger car sales logging 24,510 units in May this
year versus the 16,643 units it sold the same period last year.

General Motors India posted a 7 per cent growth in its domestic sales
selling 5789 units in May this year compared to the 5432 units it sold last
year.

"Despite the increased passenger car sales in May concerns for the whole of
FY 2009 still persist. The May sales although not spectacular is good and
comes on the back of a small sales base achieved in May last year," said
Piyush Parag, Research Analyst, Religare Securities Ltd. Car
manufacturers have lined up a slew of measures aimed at beating the
impending slump in auto sales. They  include by launching new car models.
"With about 65 per cent of all passenger car sales bought on financing, the
customer aided by increased disposable income is ready to spend more on
EMIs," said Piyush Parag.

Maruti's growth in sales numbers got a boost from its exports as it
registered a 41 per cent to in exports to 4858 units for May. Powered by its
latest compact model (A2) like the Swift and its  A3 extension - the Swift
Dzire, Maruti clocked a growth of 14.5 per cent in the A2 segment selling
44,539 units, and a 19 per cent increase in the A3 segment selling 5946
units in May this year. Sales of Swift in May was at its highest ever at
10,408 units.

Hyundai exports for the month of May rose an impressive 57 per cent at
15,751 units." "In spite of slowdown in the industry due to higher interest
rates, HMIL has been able to emerge with very strong figures, primarily
because of a very dominant presence in the compact segment where both our
offerings Santro and i10 are becoming the segment leaders," company's Senior
Vice-President (Marketing and Sales) Arvind Saxena said. "The company's
'i10' has done exceedingly well and it accounted for over 50,000 units in
the first five months of the current financial year," he added.

For General Motors India, its small car Spark boosted its overall sales in
May. Spark sold 2250 units in May while GM sold 1214
units of Chevrolet Aveo and Aveo Uva - sedan and hatchback respectively, 383
units of luxury sedan - Chevrolet Optra, 275 units of Chevrolet
Captiva, and 1667 units of MUV Chevrolet Tavera.

"The industry has seen some growth primarily driven by new models, however,
the overall market sentiment remains sluggish. The market is also worried
because of the steady increase in inflation which has lead to a sudden surge
in input costs for all manufacturers," GM India Vice-President P Balendran
said. "The fear of impending increase in fuel prices, rising interest rates
and threat of the global recessionary trend are affecting the growth of the
sector, he added.