The launch of new models and fear of hike in excise duty which will be presented at the Union Budget in March have again pulled the masses towards car showrooms in the month of February. After recording a decline of 23.8 per cent in October 2011, car sales have marked growth for four consecutive months after that.
During February, Maruti Suzuki India Limited (MSIL), the largest car maker in India released 107,653 units to its dealers in the local market. With this sales figure in the country, the company marked a growth of six per cent, as compared to the same duration last year. The boost in sales of MSIL occurred because of higher production of models like Swift Dire, which is an entry level sedan, and Swift, a hatchback. Both of these models were adversely affected by the labour crisis that also dented the reputation of the company last year.
Hyundai Motor India Limited, the second largest auto manufacturer operating in India, increased its sales by 12 per cent in a month by rolling out 36,805 units. The company's newly launched hatchback accounts for the bulk of this figure. In line with the league, sales of Tata Motors, the third largest auto manufacturer of India, expanded by nine per cent, amounting to 34,892 vehicles. Out of this volume, a large number is propelled by the hike in demand of Tata Nano, a compact car, as well as the 42 per cent rise in sales of utility vehicles. These three auto makers stand for more than 80 per cent of the total auto sales in India. Till November, increased cost of borrowing and slower economic growth had crushed the demand for automobiles, though recovery was seen thereafter.
Auto analysts speculate that the excise duty will be raised by 2 per cent in the financial budget of this fiscal, which is to be presented on 16th March 2012. Ajay Shethiya, Analyst, Centrum Broking Private Limited, said, “We expect the momentum to continue in March. We may see some moderation from April onwards, depending on the provisions in the budget.”
During the month of February, Mahindra and Mahindra (M&M), the leader in utility vehicle segment, also marked a growth of 33 per cent in passenger vehicles that amounts to 20,573 units on Year-over-Year (YOY) basis. The growth in sales of M&M was mainly because of XUV 500, a Sports Utility Vehicle, which was introduced in the Indian auto market during September. As far as other car makers are concerned, the sales of General Motors dropped by 4 per cent amounting to 8,901 units, whereas sales of Ford India Pvt. Ltd. showed a downfall of 13.5 per cent, resulting in 8,035 vehicles hitting the road.
Among two wheeler manufacturers, the sales of Yamaha Motor Private Limited reported a growth of 15 per cent to 27,050 units and Suzuki Motorcycle India Private Limited showed rise of 30 per cent, resulting in sales of 37,336 units. These hikes in sales were calculated on a low base. Hero MotoCorp Ltd., the two wheeler market leader sold 523,465 units, recording an increase of 12 per cent as compared to records of last year. Moreover, Honda Motorcycle and Scooter India Private Limited also marked a growth of 43 per cent with sales of 206,043 units (YOY).
The 10-company Auto Index went down by 0.9 per cent on BSE, resting at 9,905.03 points on 1st March 2012, whereas the 30-share Sensex also showed a downfall by 0.95 per cent, eventually tumbling to 17,583.97 points. Moreover, the Auto index was increased by 8.67 per cent in February, passing the score of Sensex which increased by 3.01 per cent.
