Mumbai: Vehicle sales in India reversed declines in April as consumers bought big-ticket items for the festive season and the wedding season kicked off earlier than usual. Two-wheeler sales led the gains, arresting 12 straight months of decline.
Early numbers from several auto makers show vehicle sales picked up even though consumers continued to fret over high interest rates for automobile loans. Vehicle makers said the harvest festival in various parts of India helped spur purchases, as it’s typically the period when farmers put money down for new vehicles after selling their crops.
India’s legally barred but widely followed custom of dowry, or giving away expensive goods to prospective son-in-laws, spurred some more buying in April amid a spurt in weddings that started early this year in keeping with the lunar calendar.
Consumers, also flooded with choice, opted mostly for new models from vehicle makers.
Maruti Suzuki India Ltd, which makes half the cars sold in India, said sales rose 22% in April from a year ago to 59,539 vehicles, as it almost doubled the sale of its newer models, such as the SX4 and Dzire sedans. Hyundai Motor Co.’s local unit posted a 36.7% uptick in sales to 21,501 vehicles riding on the brisk sales of its i10 small car. Sales at General Motors India Ltd rose 24.3% to 5,563 vehicles, led by Spark and Tavera models.
Some car makers said India’s budgetary measures to increase consumption, including cutting excise duties on some automobiles and reducing income-tax payouts for individuals, may have also helped in April. In February, finance minister P. Chidambaram announced duty cuts of four percentage points on small cars and two-wheelers.
“We feel the budget has be-en a contributory factor,” said Arvind Saxena, senior vice-president, marketing and sales at Hyundai Motor India Ltd.
Rising two-wheeler sales came even as banks have been very reluctant lenders but, some two-wheeler makers said it was mostly led by cash purchases.
Bajaj Auto Ltd, the country’s second largest two-wheeler seller, sold 23% more bikes in April from a year ago while rival TVS Motor Co. posted an almost 5% increase in its April sales. Including exports, Bajaj sold 203,930 two-wheelers, thanks to strong performance of its 125cc-plus DTS-I portfolio, comprising of popular models such as Pulsar, Avenger, Discover, and XCD. Meanwhile, TVS sold 109,937 two-wheelers in India and abroad. The bulk of all sales for these players is in India. Exports of two-wheelers out of India accounted for 10% of the total two-wheeler sales in the year ended March 2008.
“The launch of the Flame and Sport (models)” boosted sales, said Venu Srinivasan, chairman and managing director of TVS Motor.
“Also, the marriage season and Gudi Padwa (New Year’s day for Maharashtrians) helped push up sales.” TVS is targeting 15% sales growth this year, he said.
Market leader Hero Honda Motors Ltd said sales were up 9% at 286,252 units, including exports as CBZ X-treme and Hunk models drove sales in the premium segment. The company sells the majority of its two-wheelers in India.
Ravi Krishnan in New Delhi contributed to this story.