The healthy double digit growth that most of the passenger car manufacturers witnessed in February will not be seen again anytime soon, at least not in March.
Industry players and analysts feel that sales in March will take a hit and will remain flat or negative vis-?-vis last March, mainly because of a higher base. However, there could be some improvement in volumes over February, thanks to positive sentiments that have set in after three consecutive stimulus packages announced by the government.
?As compared to March last year, this month will be very tight for all car manufacturers. Sales volume was unusually high last March as people had postponed purchases in anticipation of an excise duty cut in the budget,? said Arvind Saxena, senior vice-president, Hyundai Motor India.
According to Saxena, since economic growth continues to be low and the car industry has not revived completely, growth this March would be, in all probability, flat, or negative vis-?-vis same month last year.
?These are unusual times and one cannot expect similar volumes as last year anytime soon. But, the fact that so many positive things have happened in the past, including excise duty cut and consequently lower prices followed by lower rates of interest from leading public sector banks, have helped boost customer sentiments. I expect volumes to be better than February,? said Abdul Majeed, auto analyst and partner, Price Waterhouse.
?Since the vote-on-account has already happened and nothing is expected before June-July, people are no longer holding their purchase decisions,? he added.
Sales of Maruti Suzuki India, the country?s largest passenger car manufacturer, went up by 19.08% in February at 70,625 units vis-?-vis 59,311 units in the corresponding month last year, while it posted a growth of 5.4% in February over January.
Likewise, Hyundai Motor India, the second largest car manufacturer in India, posted a 45.3% jump in sales in February at 21,215 units, compared to 14,600 units in the corresponding month of the last financial year.
The company grew marginally by 0.9% in February over January.
?Though the auto industry has exhibited a positive trend in volume growth over the last two months, we are skeptical about sustainability of high year-on-year growth registered by select counters, including Maruti Suzuki,? said Vaishali Jajoo, senior research analyst, Angel Broking.
?These are turbulent times and it is tough to comment on future sales. But, perhaps, we have reversed the decline and expect the recovery to sustain,? said Mayank Pareek, executive officer (sales and marketing), Maruti Suzuki India.
Despite car sales picking up in the last two months, analysts feel that overall, the passenger vehicle industry will grow marginally or remain flat for the financial year ending March 31, 2009.
?A large part of the current financial year saw poor demand because of high interest rates and liquidity crunch. If March is not exceptionally well, we would end up at almost same levels of 2007-08,? said a Mumbai-based analyst, adding that it is far below the 10-12% growth projections made earlier.
According to the Society of Indian Automobile Manufacturers, passenger vehicle segment registered a growth of 12.17% in April-March 2007-08 at 15,47,985 units, while there was a growth of 10.98% in March 2008 at 1,66,455 units.