New Delhi: Sales of cars rose at the fastest rate in 11 years in April as an increase in prices due to stricter emission norms and rising commodity prices failed to deter buyers attracted by new launches and stable auto loan rates.
Graphic: Yogesh Kumar/Mint
Car makers shipped 143,976 units to dealers in the month, up 39% from the 103,227 units in the same month the year earlier, according to the Society of Indian Automobile Manufacturers, or Siam. This is the fastest rate of growth since April 1999 when sales rose 50% to 41,000 units.
April has traditionally been a lean month for auto companies as buyers prefer to take delivery before the end of the fiscal year in March to take advantage of depreciation benefits.
“Normally we see some slowdown in April but this year was different because of new launches, loan rates staying unchanged and consumer sentiment remaining positive,” said Surjit Arora, analyst at Prabhudas Lilladher Pvt. Ltd.
As a result, car makers such as Maruti Suzuki India Ltd and Hyundai Motor India Ltd registered strong double-digit growth. Maruti sold 80,034 units, an increase of 23%, while domestic sales at Hyundai rose 28% to 28,501 units. Exports at Maruti rose 89% to 13,024 units; Hyundai exports rose 6.3% to 21,519 units.
“Sales are likely to remain robust even as the rate of growth comes down in the months ahead,” said Vishnu Mathur, director general of Siam.
New model launches powered sales for manufacturers that hadn’t been present in the small-car segment.
The first three months of the calendar year saw a new car—the Chevrolet Beat, the Volkswagen Polo and the Ford Figo—being launched in this segment every month.
General Motors India Pvt. Ltd sold 10,547 units in April, up 120% from a year earlier. Ford India Pvt. Ltd shipped 7,509 units, up 269%, while Volkswagen India Pvt. Ltd’s sales more than tripled to 1,489 units.
Indian subsidiaries of Japanese car makers Toyota Motor Corp. and Honda Motor Co. Ltd said they are on track to launch their made-for-India small cars by the end of the year.
Truck sales also rose as fleet operators kept up purchases after the postponment of the implementation of stricter emission norms outside of 13 large metropolitan cities. Euro 3 emission norms will now kick in on 1 October instead of 1 April.
Commercial vehicle sales at Tata Motors Ltd, the country’s largest truck maker, rose 41% to 27,991 units. Rival Ashok Leyland Ltd sold 5,990 units a jump of 270%.
Truck sales have also held up as non-banking finance companies have not yet hiked loan rates after recent increases in policy rates by the Reserve Bank of India.
Two-wheeler companies saw sales rise 22% to 855,670 units. Hero Honda Motorcycle Ltd’s sales dropped marginally to 362,390 units, a decline of 0.27%. Production at the company’s Gurgaon and Dharuhera factories in Haryana was hit due to a strike at battery supplier Exide Industries Ltd. Battery supplies have since resumed and production is normal, a spokesperson said.
Bajaj Auto Ltd sold 188,021 units, up 76%.