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October car sales highest since March

Car sales growth of 23% at 1.72 lakh units in October has been the highest since March this year, though the performance was still below the high expectations that the auto industry had from festive season demand.

Car sales growth of 23% at 1.72 lakh units in October has been the highest since March this year, though the performance was still below the high expectations that the auto industry had from festive season demand. After a slow first half of the fiscal, October (which had the Navratra period) was expected to be a month of exponential growth aided by discounts and multiple new launches such as a new version of the country’s top-selling car, Maruti Alto 800.

The strong percentage rise in car sales has largely been attributed to the low base of market leader Maruti Suzuki of October last year when its Manesar plant had severe production disruption following a labour strike, apart from strong demand for the Alto at about 30,000 units. With an 86% growth in the month to 96,002 units, Maruti’s performance is important enough to pullup the rest of the industry as it accounts for over half of passenger car sales.

“Sales have better than other months this year, but october to october, 2011 growth has not been too good. We think some demand will spill into november, but we see a struggle for the next few months with structural reforms not taking place,” Vishnu Mathur, director-general of Society of Indian Automobile Manufacturers said.

Among positive signs, Mathur said that there are talks that the interest rates may see a slight dip from January, that will help improve demands. However, low industrial growth and high fuel prices continue to damp consumer sentiments.

Apart from Maruti, South Korean rival Hyundai’s 8% rise to 35,778 units was below expectations, though its petrol cars did see strong traction. Tata Motors, meanwhile, saw sales slump 16% to 21,119 units with both Indica and Indigo ranges posting a drop in volumes.

However, the overall passenger vehicle segment saw a 34% jump to 2.46 lakh units in october boosted up by Mahindra’s diesel-dominated utility vehicle range. Mahindra’s sales were up 44% to 26,932 units. Sales for the overall auto industry in October were up 15% to 1.6 million units.

Meanwhile, with a strong push from scooters, two-wheeler sales made a comeback in the month with a 12% growth to 1.2 million units. “Two wheeler demand had been low on concerns of poor rainfall. But we may see recovery over next few months because monsoon has not been too bad,” Mathur said.

Two-wheeler market leader Hero MotoCorp returned to 5 lakh plus monthly sales numbers with a 3% rise to 5.29 lakh units, while erswhile partner Honda, which has maintained strong growth through the turbulent last few months, saw sales going up 41% to a record 2.50 lakh units. Bajaj Auto’s October motorcycle volumes (including exports) were up 3% to 3.61 lakh units.

Commercial vehicle (CV) sales also went up 8% to 66,722 units, largely on a strong performance coming from the light CVs even as the demand for medium & heavy CVs comntinued to wane. In fact, SIAM has written to the Goverment suggesting multiple ways to help the CV industry recover. “Government purchases need to re-start, while the JNNURM scheme needs to be re-introduced. A one-time fleet modernisation policy is also needed – to take away vehicles manufactured before year 2010,” Mathur said.

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First published on: 10-11-2012 at 03:28 IST
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