Passenger car sales accelerate 8% in June

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New Delhi: In a sign of sustainable recovery of the auto sector, passenger car sales increased by 7.8% in June at 1,07,531 units vis-à-vis 99,741 units during the same month last year.

According to the Society of Indian Automobile Manufacturers (Siam), the compact car segment led the growth with several new launches in the last few months. Sales of compact cars, which include Maruti Swift, A-Star, Ritz, Hyundai i10, i20, Santro, Honda Jazz and General Motors Spark and U-Va to name a few, jumped by 23% last month at 83,719 units compared to 68,068 units in June 2008. The compact segment accounts for about 70% of the total car market in India and the new models that hit the road in this category include A-Star and Ritz from Maruti Suzuki India, Jazz from Honda Siel Cars India and Grande Punto from Fiat India Automobiles.

"It is a kind of pent-up demand. A major part of sales in the two-wheeler and passenger car segment is led by sales of new models," Dilip Chenoy, director general, Siam, said.

According to Chenoy, lower interest rates and easier availability of funds now vis-à-vis middle of the last year have further helped in the segment growth. However, he said in absolute terms, the growth on month to month was small. "Siam's earlier forecast of 3-5% growth for 2009-10 was based on two stimulus packages by the government. Currently, nothing has changed and therefore the flat trend is worrying," he said.

While sales of two-wheelers increased by 17.4% at 7,06,937 units vis-à-vis 6,01,941 units in June last year, three-wheelers posted a growth of 13.2% at 33,727 units compared to 29,802 units in June 2008. However, sales of commercial vehicles remained negative due to slowdown in economy and the segment registered a decline of 12.5% in June at 36,193 units as compared to 41,369 units in year-ago period.

Though domestic car sales rose in June from last year, they were actually down from May when the total volume totaled 113,490 units. The same goes for two-wheelers as well. They were down when compared to May sales (727,937 units). Sales of trucks and buses actually went up from May (30,800 units). For the April-June 2009 quarter, passenger car sales rose by 4.75% to 323,920 units. Meanwhile, car exports shot up by nearly 47% in the first quarter of FY10 to 97,039 units from 66,119 units in the year-ago period.