The Hindu Business Line : Auto sales zoom in Feb, but cos wary of bumps ahead

Mumbai, March 2 The auto sector had cause for cheer in February with sales of cars and two-wheelers on the ascent. The commercial vehicle sector too is showing signs of revival with market leader Tata Motors reporting encouraging numbers.

Maruti-Suzuki led the way in cars with its highest ever monthly sales at 79,190 units, breaking its own record of 71,779 cars last month. Domestic sales, which were up 19 per cent, totalled 70,625 units while exports almost doubled to 8,565 cars.

“Sales have been improving since mid-December thanks partly to the Centre and our own efforts. The cut in excise duty, interest rate and fuel price combined with our efforts in tapping the rural market and working out special schemes for government employees paid off,” Mr Mayank Parekh, Executive Officer, Sales and Marketing, told Business Line.

He conceded that vehicle financing, especially by public sector banks, had played a big part. “It had dropped to 60 per cent and now it is back to the traditional 70 per cent,” he said.

The 24 per cent surge in Maruti sales, however, took market analysts by surprise. “Despite the Sixth Pay Commission package, excise duty cut and interest rate cut, this is something beyond what one could have dreamt of,” said Mr S. Ramnath, auto analyst with SSKI.

Hyundai Motor India showed a 32 per cent growth at 38,254 units, of which the domestic market accounted for 21,215 units and exports the rest.

Mr Arvind Saxena, Senior Vice-President - Marketing and Sales, advocated caution. “February sales saw a slight upturn with double-digit growth for the industry but the overall market situation continues to be challenging. We expect a fairly flat sales growth curve for the industry in the quarter ending March this year.” Tata Motors reported its highest ever monthly sales of passenger vehicles this fiscal since May at 19,039 units. The Indica and Indigo range showed a 15 per cent growth while utility vehicles were down 34 per cent.

Mahindra & Mahindra showed 17 per cent growth mainly on the back of its recently launched Xylo multipurpose vehicle, which clocked 2,287 units. The company had targeted an annual capacity of 24,000 units. Mr Rajesh Jejurikar, Chief of Operations, said it was too early to speak of a revival but it was more important to see if this could be sustained.

Two-wheelers perk up

Sales were brisk in the two-wheeler segment too with market leader, Hero Honda showing the way with 3.29 lakh units, a 24 per cent increase from February 2008. Honda’s wholly-owned arm, HMSI (Honda Motorcycle & Scooter India) continued to do brisk business with February sales closing at 1,00,090 units.

Bajaj Auto showed a 17 per cent drop in sales at 1.32 lakh units while TVS Motors’ two-wheeler sales grew by 13 per cent at 1.07 lakh units. Domestic sales of both companies were almost at par at 91,000 units.

The Pune-based company sold 80,164 units in the 125-plus segment and said it would launch four product upgrades in this category during April.

In commercial vehicles, while Tata Motors showed a 25 per cent drop on an annualised basis, February sales at 23,454 units were the highest in the last four months.

According to a company statement, while the Centre’s financial stimulus has had a positive impact, it will still take some time for the retail market to reach the high levels of last fiscal.