Car sales cross six-lakh mark

MUMBAI, APR 26: Indian automobile industry created a record of sorts as it crossed the six-lakh mark sales during the just ended fiscal by...

MUMBAI, APR 26: Indian automobile industry created a record of sorts as it crossed the six-lakh mark sales during the just ended fiscal by posting a growth of 55.8 per cent. Passenger car sales increased to 6.39 lakh units during fiscal 1999-2000 as compared to 4.10 lakh units in the previous year as the sector witnessed a boom with the revival of the economic sentiments.

Market leader, Maruti Udyog Ltd MUL registered a 21.8 per cent growth at 3.98 lakh cars during the fiscal 1999-2000 but its market share dipped sharply to 62.2 per cent during the year compared to 80 per cent in 1998-99, according to the Society of Indian Automobile Manufacturers SIAM. The gains at Maruti8217;s cost were mainly made by Hyundai, Daewoo and Telco.

Interestingly, global players like General Motors and Mercedes Benz, failed to revive their fortunes as it recorded negative sales during the fiscal. General Motors sales declined by 13.5 per cent to 3,047 units in 1999-2000 against 3,524 cars sold in the previous fiscal. Luxury car maker Mercedes Benz India Ltd MBIL also posted a negative growth of 20 per cent by selling just 893 units during the reference fiscal against 1,116 units in 1998-99.

But analysts said the momentum was unlikely to last in the current year as the number of new models in the market run thin. quot;This type of sales growth was primarily fuelled by the launch of a number of new car models. It will not be sustained next year as auto firms are likely to launch only upgrades of these models,quot; said S Ranganathan, an analyst at IKP Shares and Securities Ltd.

quot;The overall growth in the passenger car segment next year should be about 35 per cent,quot; he said. Car sales in March alone rose 47.9 per cent to 73,090 units from 49,410 in March 1999.

Analysts said growth was likely to shift to the mid-size car segment from premium small cars in 2000/01. A wider base in 1999/2000 would also translate into a slowdown in the sales growth percentage in the new financial year, they said.

Sales of commercial vehicles, mainly trucks and vans, rose 22.4 per cent to 171,319 units in 1999/2000, up from 139,930 in the previous year. In March, commercial vehicle sales were up marginally at 24,548 units against 24,032 a year earlier. Medium and heavy commercial vehicle sales fell to 15,906 units in March from 16,752 in the same month last year.

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quot;The slowdown in commercial vehicle sales is worrying. It seems that the impact of a diesel price hike last October has had its effect on the fourth quarter, although it had not shown up during the third quarter,quot; said Vidyadhar Ginde, analyst at Birla Sunlife Securities Ltd.

Analysts said the slowdown in commercial vehicle sales during the end of the fiscal year showed the segment may not have completely pulled out of a sluggish phase evident last year. quot;We hope a rise in railway freight rates will help the commercial vehicle industry,quot; said Ginde.

The fortunes of the industry would, to a large extent, depend on overall economic growth. Factors such as monsoon rains, which affect the country8217;s agricultural growth, may also determine the sales volumes in 2000/2001, analysts said.

Two-wheeler sales were likely to continue showing the tilt in growth towards motorcycles from scooters. Motorcycle sales in 1999/2000 grew to 1.79 million units from 1.39 million in the previous year, while scooter sales declined to 1.25 million units from 1.32 million during the period.