Auto sales highest-ever for May, growth rate to moderate

While increased consumer spending and low finance rates have led to the highest-ever auto sales for May, the industry association has warned that the high growth rate has started moderating and will likely dip further.

It added that the industry is optimistic, though worried that sales may come under pressure if interest rates are hiked to control inflationary pressures.

According to the Society of Indian Automobile Manufacturers (SIAM), overall vehicle sales grew 30 per cent in May to 1,208,851 units, and eight per cent over the previous month of April.

“With the economy doing well and per capita income rising, auto sales have been the highest-ever recorded for the month.

However, there is a moderation in the growth over the last 3-4 months and the net figures have been going down.

In all segments except commercial vehicles, the growth rates have come down from February and March,” said Mr Vishnu Mathur, Director-General, SIAM.

Passenger car sales in the month grew 30 per cent to 148,481 units, while the umbrella passenger vehicle segment posted a 35 per cent growth in sales. The rise in car sales has been attributed to the various recent launches, especially in the A2 small car segment.

Car market leader Maruti Suzuki's overall sales (including exports) crossed the one lakh figure in May, with domestic sales rising 27 per cent to 90,041 units.

Rival Hyundai Motor India's sales grew by 15.53 per cent, while Tata Motors' sales in the segment rose 33 per cent.

On the back of strong sales of the Figo hatchback, Ford India saw sales grow almost four times to 8,080 units. Similarly, the success of the Beat and Cruze also boosted General Motors sales by 61 per cent.

Two wheelers

Meanwhile, two wheeler sales rose 29 per cent, with motorcycle sales increasing 26 per cent to 725,311 units, and scooter sales rising 45 per cent to 1,57,509 units.

Market leader Hero Honda witnessed a 14 per cent growth, while Bajaj Auto's sales grew 68 per cent. TVS Motors and Honda Motorcycle and Scooter India posted a sales growth of 27 per cent and 37 per cent, respectively.

Commercial vehicle sales in the month rose 58 per cent, with market leader Tata Motors posting a 42 per cent growth.

Mr Mathur said that with the monsoon expected to be good this year, commercial vehicle sales are expected to rise with the increase in freight.

Exports

Overall exports in the month rose 50 per cent, led by commercial vehicles and three wheelers. SIAM said that exports remain a concern as the demand in Europe is yet to improve. Source : Business Line (Online Edition) (6/9/2010) Auto sales highest-ever for May, growth rate to moderate While increased consumer spending and low finance rates have led to the highest-ever auto sales for May, the industry association has warned that the high growth rate has started moderating and will likely dip further.