Mumbai: India’s large two-wheeler and car makers sold more vehicles in June compared with a year ago, but experts and analysts say their sales in the months ahead could slow.
Car and bike sales have improved for three straight months since April.
But inflation in India, Asia’s third biggest car market by sales, peaked at a 13-year high in the last week of June, forcing the Reserve Bank of India, the country’s central bank, to tighten money supply. As a result, banks have raised lending rates in a country where 70% of all cars and half of all bikes are bought on credit.
A 10% hike in petrol and diesel prices is also likely to force some potential buyers to defer purchases. “Higher interest rates and the fuel price hike will slow sales in the next couple of months,” said Vaishali Jajoo, automotive analyst at Angel Broking Ltd. “We expect overall sales to grow 5-6%, (lower than) an earlier projection of 8% for this fiscal.”
The country’s largest bike seller, Hero Honda Motors Ltd, sold 295,675 two-wheelers, 16% more than in June 2007.
Sales for Bajaj Auto Ltd rose 8.1% to 175,903 units on the back of strong sales of its 125cc and higher engine capacity models.
In passenger cars, Hyundai Motor’s India sales rose 34% to 21,881 units on the back of the success of i10, its small car. However, Maruti Suzuki India Ltd, which makes half the cars sold in the country, posted a mere 0.7% increase in domestic sales to 56,411 units.