Feb auto sales up 12% on improved sentiment, tax hike fear
March, 13th 2012
Record car sales in February is expected to help carmakers overcome sluggish performance so far this fiscal. It also augurs well for numbers going into the next fiscal.
Improved market sentiment may have driven up sales, but many buyers are believed to have rescheduled purchases fearing a hike in prices after the Budget.
While overall auto sales rose 12 per cent in February, passenger vehicle sales went up a strong 16 per cent with the subset of passenger cars crossing the two lakh unit sales milestone, according to the Society of Indian Automobile Manufacturers (SIAM) data.
A stop to the rising finance costs has helped, though many buyers would also have hurried up purchases expecting higher tax from April, especially for diesel cars. Also, Maruti Suzuki's production is now normalised (after dropping in end-2011 due to a workers' strike), said Mr Sugato Sen, Senior Director, SIAM. With strong sales last month, cars should now end with an up to two per cent growth for the fiscal, while total passenger vehicle sales are likely to be in the 2-4 per cent range.
The top three carmakers, Maruti, Hyundai and Tata Motors, who together account for 69 per cent of the passenger vehicle market, posted six, 13 and 15 per cent growth, respectively.
Maruti's increased volumes were supplemented by its January deal with Fiat which boosted its diesel engine capacity. However, smaller volume players such as Ford, Fiat, General Motors and Volkswagen saw a sales dip.
Two-wheeler sales were up 12 per cent, with leader Hero MotoCorp posting a 10 per cent growth. Bajaj Auto's sales were flat, while Honda Motorcycle crossed TVS Motor as the third-largest two-wheeler maker on a 49 per cent growth.
Commercial vehicle sales in the month were up 19 per cent, with LCV sales up 31 per cent (43,982 units) and bus sales rising 43 per cent (5,136 units)
Three-wheeler sales will remain depressed since much of the demand has shifted to four-wheeled goods- and passenger carriers such as the Tata Ace. The medium and heavy commercial vehicle segment is also not doing well on a slowdown in infrastructure and mining-related spending, Mr Sen said.
Total exports in the month rose six per cent, with commercial vehicle exports rising 34 per cent and passenger vehicles dipping 19 per cent on slow European demand.