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Auto sales grow highest in a decade

BS Reporter  |  New Delhi 

Several new launches in the compact car category, easier availability of finance and the low base effect of last year helped the Indian automobile industry to continue its growth momentum of 2009 into April 2010 as well, with passenger car sales registering their highest growth in a decade.

According to the Society of Indian Automobile Manufacturers (Siam), total passenger car sales in the country surged 39.5 per cent last month at 1,43,976 units, as against 1,03,227 units during the same month last year. This is the highest growth in car sales in April in the last 11 years. Car sales had grown 50.3 per cent in 1999.

“Low base of last year has resulted in surge in passenger car sales in April and, while this will continue to play a prominent role even in the next two months, there could be a little bit of tempering in the second quarter, when higher sales of last year impact growth rates,” said Vaishali Jajoo, senior auto analyst, Angel Broking.

However, on a month-on-month basis, there has been a decline of 7.4 per cent in domestic passenger car sales in April, signalling the upcoming impact of increasing commodity prices. Siam data showed 1,55,600 units of passenger cars were sold in March; 1,53,845 units in February; and 1,45,905 units in January.

According to Jajoo, while new launches in the compact car category and easier availability of finance were some factors that supported growth so far, demand would get impacted second quarter onwards, as raw material prices continue to shoot up and higher base effect comes into play.

Sales of Maruti Suzuki India went up 22.1 per cent at 68,668 units in April 2010 as compared to 56,228 units the same month last year, while its closest rival Hyundai Motor India posted a jump of 28.1 per cent at 28,501 units last month vis-à-vis 22,241 units, and sales of Tata Motors went up 76.4 per cent at 19,762 units, as compared to 11,202 units during the same month last year.

“On the back of overall improvement in the economy over the last few quarters, there is an improvement in customer sentiment and, therefore, high sales in April, which is traditionally a lean month, as people advance their purchases. However, we have already started seeing moderation in demand and, going forward, it could stabilise at these levels,” said Vishnu Mathur, the newly-appointed director-general of Siam.

With high growth in the commercial vehicle segment and two-wheelers, the overall domestic sales also went up 25.24 per cent at 1,120,081 as compared to 8,94,380 units in April last year.

While the total two-wheeler sales in April grew 22.06 per cent at 8,55,670 units as against 7,00,987 units in April 2009, sales of commercial vehicles went up 64.5 per cent at 49,086 units vis-à-vis 29,842 units in the year-ago period.

“In the commercial vehicle segment, freight rates have increased and this has encouraged owners to invest on new vehicles. Thus, the higher sales,” said Mathur, adding that sales of LCVs went up 42.2 per cent in April at 26,759 units as compared to 18,819 units, M&HCVs registered two-fold jump in sales at 22,327 units as compared to 11,023 units in the same month last year.

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First Published: Tue, May 11 2010. 00:47 IST