Sales of the country’s car makers, led by market leader Maruti Udyog Ltd, grew in April 2007 compared with a year ago, on increased demand for new models such as the Zen Estilo, and as companies wooed customers with discounts to lessen the impact of higher lending rates.
Maruti posted sales of 48,652 units in April 2007, up 17% over the 41,574 units it sold a year ago as demand for recently-introduced cars increased and it despatched units of its SX4 model to dealers ahead of its launch in May. Rival General Motors India Ltd sold 4,474 passenger vehicles, 22% more than the 3,662 vehicles it sold a year ago, boosted by sales of its newly-launched Chevrolet Spark model. The company said it sold 1,181 units of the model in April.
With lending rates rising by as much as 6 percentage points in the last four months to 14%, companies gave away higher discounts on their most popular models to reduce the effective monthly loan repayment customers had to make. Some companies reduced the effective rate of interest to a little under 9%. Maruti gave discounts for its Alto and Swift models, while rival Hyundai Motor India Ltd introduced offers for its Santro model.
Maruti’s discounts are “not on a nation-wide scale and only for some models,” said Jagdish Khattar, managing director of Maruti.
The local unit of Honda Motor Co. reported that it sold 4,891 vehicles, up 7.5% over the 4,551 units it sold a year ago. That’s sharply slower growth than the 27% it grew in April last year.
In the two-wheeler segment, Hero Honda Motors Ltd, India’s largest two-wheeler manufacturer, posted a 4.9% increase in April sales to 2,62,544 units as demand picked up in the world’s second-largest market. The company sold 2,50,366 units in April 2006. Rival Bajaj Auto Ltd reported a third straight monthly decline in sales as its dealers bought less to reduce their inventory. Bajaj sold 1,90,052 two-wheelers in February 2007, 10% less than the 2,12,123 units it sold a year ago.