Pick-up in car sales, but imports shrink in Jan

Written by Corporate Bureau | New Delhi | Updated: Mar 3 2009, 06:41am hrs
The governments stimulus efforts seem to have started working for the countrys passenger car industry, which makes up 17.8% of the automobile sector, with leading players reporting a rise in sales in February. Sales picked up for all players on a year-on-year and as well as monthly bases, signaling a reversal in trend as well as strengthening of consumer sentiments.

However, the same cannot be said about the countrys trade sector, reeling under the impact of the global slowdown. Trade figures released by the commerce ministry on Monday showed import shrunk for the first time in this fiscal. January imports fell by 18.2% over the same month last year. Exports contracted for the fourth consecutive month. Shipments in January shrunk 15.9% to $12.38 billion from $14.7 billion a year ago. Government sources said the negative trend is likely to continue in the coming months, indicating that the $200-billion export target set for 2009-10 would be difficult to achieve.

On the automobile front, Maruti Suzuki India, the countrys largest passenger car manufacturer, registered a 5.4% jump in sales at 70,625 units in February compared to 67,005 units in January. In December, the company had sold 52,029 units. In fact, on a year-on-year basis, the company posted its highest growth of 19.08% in domestic market in February at 70,625 units compared to 59,311 units during the same month last year.

The increase in demand is an interplay of various factors, one being the impact of the second stimulus package, following which the interest rates had come down and car prices had been reduced. This boosted the sentiments of the buyers and fuelled growth, says Mayank Pareek, executive officer (sales & marketing), Maruti Suzuki.

According to Pareek, Martuis increased focus on the rural market, which is flourishing on the back of a good crop, and its tie-up with a large number of public sector banks have also helped Maruti to improve sales.

Sales of Hyundai Motor India, the countrys second largest player, went up marginally by 0.9% in February at 21,215 units as compared to 21,016 units in January. The company sold 15,602 units in December. On a year-on-year basis, the company posted a 45.3% jump in domestic sales via-a-vis February last year.

Tata Motors, however, registered a drop of 9.3% in domestic sales at 19,039 units in February compared to 20,996 units in January. However, on a year-on-year basis, the company saw a 1.5% increase in sales in February.

Despite this improvement, industry players feel the market situation continues to be challenging. The overall market situation continues to be challenging and not much should be read into the February growth as last year in February, the Budget was to be announced and a substantial amount of sales were deferred till March, says Arvind Saxena, senior vice-president (sales and marketing), Hyundai Motor India.

Adds Pareek of Maruti: These are turbulent times and its tough to comment on the future sales. But perhaps, we have reversed the decline, and we expect the recovery to sustain.

Sales of General Motors India went up 25.9% at 4,921 units in February against 3,907 units in January. However, on a year-on-year basis, the company posted a decline of 11.5%.

Honda Siel Cars India posted a decline of 3.36% in sales at 5,579 units last month compared to 5,773 units in January. On a year-on-year basis, the company registered a jump of 47.8%.

All this growth comes despite a 2-3% increase in car prices made by all players in January-February.