New Delhi: In an indication that the pickup in economic activity is likely to be sustained, commercial vehicle (CV) sales rose for the third straight month in September.
Led by Tata Motors Ltd and Ashok Leyland Ltd, auto makers sold 45,451 trucks and buses in September, up 6.4% from a year ago, according to data released by the Society of Indian Automobile Manufacturers (Siam).
Significantly, sales of large multi-axle trucks capable of carrying 25 tonnes of cargo more than tripled to 1,559 units in September, compared with the same month last year.
“This is a classic sign of an economic revival,” said Ramnath S., vice-president of research at financial services firm IDFC-SSKI Securities Ltd, referring to the rise in sales of large multi-axle trucks.
Ramnath said that this is just the beginning of a revival for the commercial vehicle sector. “Domestic demand is up and the decline in exports has been reduced,” he added.
Makers of cars and two-wheelers also reported a rise in sales.
Car sales, which have risen for the past eight months, increased sharply to 129,683 units, up 20.6% from the year-ago period. Still, car makers are wary of how demand will hold up after the festive season. The impact of scanty monsoon rains is also an unknown.
For now, sales have been held up in part by new model launches. Nine new cars have been launched in the past year. Siam does not release individual model sales.
Two-wheeler sales registered a modest 7.6% increase to 778,424 units. The relatively lower growth was partly due to labour problems at Honda Scooters and Motorcycle India Pvt. Ltd. It registered a 10% drop in production to 81,505 units.
Siam, which reports dispatches to dealers and not retail sales, said it would increase its annual sales forecast in November for the fiscal year to 31 March.
“We have reached the upper end of the forecast we had given in April. So we would need to revise this,” Siam director general Dilip Chenoy told the media.
Siam had forecast a growth rate of 3-5% for cars for the year that began on 1 April.
In the first six months of the year, car sales have risen 14% and two-wheeler sales have grown 15%.
Easier availability of financing and low interest rates have played a key role in getting the sales back on track. The average rate for auto loans has fallen by 4% to 10% in the past year, according to Siam.
State Bank of India, the country’s largest lender, has moved aggressively to cut rates. It now offers loans at 8% for the first year and 10% for the second and third years.