Auto makers in India, Asia’s third largest vehicle market, have managed to hold on to growth though at a slower pace in March, helped by new models and price snips after excise tax cuts in the Union Budget helped some post double digit sales increases.
Maruti Suzuki India Ltd, which makes half the cars sold in the country, however, saw minor dips in volumes. Korean Hyundai Motor Co.’s local unit registered a 52% increase in March sales to 29,401 units as it sold more of its i10 small car, while rival General Motors India Ltd recorded a similar increase on back of a new marketing plan that promised cashless vehicle maintenance to customers for three years.
Mahindra and Mahindra Ltd, the country’s largest utility vehicle manufacturer, sold more of its Bolero and Scorpio models to register a growth of 16.5%. Other companies that reported spurt in sales for the month include Skoda India and Honda Siel Cars India.
India’s largest auto maker by revenue, Tata Motors Ltd, and Maruti were the only producers that registered a fall in volumes among companies which have so far reported their sales. Tata reported a 4% dip and Maruti, 0.21%.
Analysts expect car makers to post sales growth in the current fiscal year riding primarily on new launches and the income-tax benefits that kick in this month and give consumers more spending money.
Almost all passenger car makers have lined up new products this fiscal, which they say will help them boost sales, in a economy battling high inflation and tight credit. While Maruti launched the Dzire sedan recently and said it will introduce the A-star small car later this year, Tata Motors may introduce a refurbished Indica besides the Nano.
The situation, however, is much grimmer for two-wheelers, the nation’s main mode of transport. Sales fell throughout the last fiscal that ended 31 March for most companies and last month was no exception.
“Financiers might look to loosen their purse strings if they don’t see growth happening in bank credit,” said analyst Amit Kasat of Motilal Oswal Securities Ltd. “There will also be lot of cash in consumer hands,” following the budget’s tax breaks. But “this will happen in the second half”.
About 60% of two-wheeler sales in India are financed by banks and other lenders.
TVS Motor Co. Ltd reported declining sales for the 13th straight month with domestic volumes dipping 3.8%. Honda Motorcycles and Scooters India, the largest scooter seller in the country, sold 27% more two-wheelers riding on sales of scooters, which are primarily sold to an urban market.