New launches, rains, higher government salaries spell bonanza for Maruti Suzuki, Hyundai and other auto companies
Top 12 automakers posted 16 per cent growth in August sales at over 2.5 lakh units, hope for festive season boost.
Sales at the country’s top 12 automakers are estimated to have grown 16 per cent in the past month to more than 2,55,000 vehicles, according to an ET analysis of the numbers announced by some of the companies and information given by industry insiders. These are wholesale numbers as monthly retail sales aren’t reported regularly.
Industry experts cited low fuel prices, new launches, especially in the compact SUV segment, good rainfall that is expected to revive the rural economy and higher salaries for government staff for the improved sentiment.
Subrata Ray, senior group vice president at ICRA Ratings, said he expects demand to remain healthy in the remaining part of the year. He predicts passenger vehicle sales to grow 8.5-9.5 per cent in the fiscal year through March 2017.
Market leader Maruti Suzuki posted a 12.3 per cent increase in August sales, dispatching 1,19,931 vehicles. Its main sales driver was utility vehicles, whose sales more than doubled last month. In this segment that includes the Ertiga, S-Cross, and Vitara Brezza, it sold 16,806 vehicles. Car sales rose 4.4 per cent to 90,269 units.
At Hyundai Motor India, the country’s second-largest carmaker, the growth was 6.7 per cent. Renault India registered its highest ever-monthly sales of 12,972 units in August, more than eight times the yearago period, driven by demand for the Kwid small car.
Utility vehicle maker Mahindra & Mahindra posted a 29 per cent increase in sales last month.
"The improved spread of monsoon as well as new product launches have helped the auto industry perform positively," said Pravin Shah, the chief executive of Mahindra’s automotive business. The Supreme Court lifting its ban on the registration of large diesel vehicles in the Delhi region also bodes well for the industry, he said.
In the two-wheeler segment, the country’s top two manufacturers reported more than 25 per cent growth each. Hero MotoCorp sold 6,16,424 units, including exports, an expansion of 28 per cent over the corresponding month last year. At Honda Motor’s domestic two-wheeler unit, sales rose 25 per cent to 4,66,342 units.