Automobile sales jump 30%, demand to grow further

Riding on the success of the new small cars in the market, passenger car sales recorded a 48.9 per cent growth in sales, while commercial vehicles and the motorcycle segment grew at 31.62 per cent and 23.90 per cent respectively during April-October. "We see no reason for the pace to slow down. Positive sentiment is buoying the market and the economy is also strengthening," say analysts.

The largest carmaker in the country, Maruti Udyog registered a 16.34 per cent growth during the period selling 2.29 lakh cars as compared to 1.97 cars in the same period last year.

However, scooter sales were down by six per cent in the first seven months to 7.23 lakh scooters as against 7.69 lakh a year ago. Says Rahul Bajaj, chairman of Bajaj Auto: “The market is shifting towards motorcycles from scooters… we are looking at the option of selling more motorcycles in the next few months though there are no plans to increase capacity.”

The growth in sales of the passenger car segment was even more impressive in October at 66.04 per cent compared to last year, mainly due to new entrants like Daewoo’s Matiz, Hyundai’s Santro and Telco’s Indica which has grown the market instead of poaching deep into Maruti’s market share.

Incidentally, Telco’s Indica has received a severe setback as it was conferred a ranking of as low as 17 in quality standards by automobile magazine JD Power. The ranking shows that theIndian company has failed to maintain high quality standards for its Indica vis-a-vis other car manufacturers in India and compromised on quality to offer a cheap car.

Most of the players in the mid-size and luxury car segment suffered serious setbacks as their sales continued to slide. The largest automobile companies in the world General Motors and Ford Motor Company recorded negative sales growth of 29.6 per cent and 25.27 per cent respectively in April-October. To increase the market shares, while Ford had already launched its aggressively priced Ikon, and GM has lined up Opel Corsa for the mid-sized segment.

In contrast to US car makers, Daewoo, Hyundai increased their sales during April-October by 311.45 per cent, and 145.49 per cent respectively as compared to the same period last year.

Motorcycles continued to eat into the market share of scooters as both Bajaj Auto and LML finished with lower sales figures of 3.31 lakh scooters and 1.7 lakh in April-October compared to 3.67 lakh and 1.94 lakh ayear ago.

Hero Honda, the largest motorcycle manufacturer in the country, increased its lead over its competitors growing at over 40 per cent to 4.04 lakh motorcycles compared to 2.87 lakh in the same period last year.

Bajaj, which recorded a 8.12 per cent growth in sales at 2.13 lakh motorcycles during April-October, finished a distant second. Sales of TVS Suzuki and Escorts Yamaha grew at 25.22 per cent and 10.74 per cent selling 1.81 lakh and 1.22 lakh motorcycles respectively during the period.

Reflecting the revival in the economy, commercial vehicles recorded a 31.62 per cent growth in sales during April-October, mainly on account of a 53.19 per cent growth in in medium and heavy commercial vehicle segment.