Mumbai: On the first day of the new fiscal, data released by a handful of auto makers for March showed that all but one among seven firms had expanded sales in a month that historically records the highest demand. But uncertainty remains on whether demand would be sustained in the coming months.
In March, Hyundai Motor India Ltd, India’s second largest car maker by volumes, saw its domestic sales fall nearly one-sixth compared with the same month last year. The company had in March 2008 reported an expansion in sales of 52.3% over the year-ago period, according to industry group Society of Indian Automobile Manufacturers, or Siam.
March sales at Tata Motors Ltd, the country’s largest truck maker, continued to fall but the decline was less steep than in the last four months. At 29,006 units, the company sold 19% less trucks in March than the same period a year ago but 24% more than February this year. Passenger vehicle sales contracted 4% to 23,680 units.
Mahindra and Mahindra Ltd, or M&M, India’s largest tractor and utility vehicle company, saw its in-country sales expanding 11% to 25,748 utility vehicles in March, but a senior executive told a TV news channel sales in May and June will be testing months after strong sales expected for April, as India gets ready for the general election from mid-April. It did not disclose tractor sales.
“March is always a high-selling month. So it’s very rarely that you will see the March kind of numbers to continue,” Pawan Goenka, M&M automotive division president, told CNBC TV18 on Wednesday.
In fiscal 2009, said Arun Malhotra, senior vice-president, sales and customer care, automotive sector, at M&M, his firm will report a 8.4% growth in utility vehicle sales over the previous year, which attributed it to a demand pull from cities other than the metros, which are relatively insulated from the slowdown.
Auto sales in India in March traditionally are high, given that it’s the last month for businesses to be able to avail of depreciation benefits on a vehicle asset such as a car or truck for that accounting year.
Sales of commercial vehicles such as trucks, buses or cargo vehicles with lighter tonnage, for instance, in March 2008 were 14.16% higher from the year-ago month.
The year-on-year growth of car and utility vehicle sales In March 2008 stood at nearly 11%; the expansion in March 2007 from the same month the previous year was 5%, according to Siam.
“The actual picture will emerge once the new government takes over after the polls,” Vaishali Jajoo, an analyst with Angel Broking Pvt. Ltd said. Honda Siel Cars India Ltd, also showed a growth of 32% in its sales, registering a total of 7,368 units in March this year. The company’s cumulative sales for the fiscal, however, dropped 16.5% to 52,420 units.
Sales of two-wheelers, mostly bikes, continued to be less affected, going by sales data released by two manufacturers. Hero Honda Motors Ltd, the top bike-maker in the country by volume sales and revenues, reported a 10% growth in March sales. It ended the year with sales of 3.34 million bikes, 12% more than fiscal 2008.
Analysts, however, predicted a slowdown in the coming months owing to the high base effect of last year kicking in.
“While it will continue to grow, it would not be more than 5% to 6%,” said an analyst with First Global Research, who asked not to be identified because he is not authorized to be interviewed by the media.
Smaller rival TVS Motor Co. Ltd said it had sold 4% more in March (121,988 units) than the same month of 2008. For the entire fiscal, company’s motorcycle sales increased 3%, compared with 2007-08.
The Indian units of Japanese two-wheeler makers Honda Motorcycles and Yamaha Motor Co. also registered growth. While Honda grew 2.5%, selling a total of 81,865 units in March, Yamaha sold 14,558 bikes. Honda Motorcycle and Scooter India Pvt. Ltd saw 18% growth in fiscal 2009, selling a total of 1.07 million units.
Janaki Krishnan of Reuters contributed to this story.