Auto makers post record sales in January

The new year has brought good news for almost all car manufacturers, with market leader Maruti Suzuki, Hyundai Motors, Tata Motors, Mahindra & Mahindra, General Motors and even Fiat, posting their highest monthly sales since their inception.

Sales of cars, sports utility vehicles and multi utility vehicles from these auto makers and also that of Honda-Siel and Mahindra-Renault together grew 33 per cent to 175,526 units in January against 131,636 units sold in the same month a year ago.

Leading the charts was market leader Maruti Suzuki, which saw a 21 per cent jump—despite a price increase—on the back of additional numbers from the newly-launched Eeco (a utility van) and continued demand for the Ritz, A-Star, Swift and DZire.

This is the second straight month that Maruti set a new monthly sales record since inception, December being the first when sales crossed 100,000 units. Maruti Suzuki chairman R C Bhargava says he expects the trend to continue even if the government withdraws the four percentage point excise concession in phases.

"If the government withdraws half the concession in the Budget, the increase in car prices would range from Rs 5,000 to Rs 15,000. This is not enough to make a dent in sales, especially since interest rates are not going up in the near future. If both these things happened at the same time, there would have been an issue," he says.

Bhargava adds that the January price increase was less than 1 per cent for the buyer because the company had absorbed a large part of the cost increase in making the cars Euro 4 emission norms compliant. The high January figures were also the result of dealers exhausting inventory in the December surge.

Industry analysts, however, are more cautious about the future. "Interest rates on auto loans have been soft till now which has largely helped growth. Moving forward, interest rates are expected to firm up leading to a drop in retail activity," predicts a Mumbai -based analyst. 

Meanwhile, Korean brand Hyundai Motors, also posted robust sales in January, with traditional models such as Santro, i10 and i20 drove demand. Arvind Saxena, director - marketing and sales, Hyundai Motor India said, "We hope the momentum will continue with the help of the stimulus package offered by the government."

India's largest SUV maker, Mumbai-based Mahindra & Mahindra, also saw sales of the Xylo, Scorpio and Bolero  surge during the month despite the company raising prices 1 to 1.5 per cent. Rajesh Jejurikar, chief of operations, M&M said, "We are glad that the momentum has continued in January and hope that it will continue. The effect of the fear of the stimulus withdrawal will be more seen next month."

Tata Motors, India's third-largest car maker, also posted its highest-ever monthly sales of 26,245 units in January helped by strong demand for the new Indica and Indigo models. A total of 4,001 units of the Nano were dispatched during the month. 

The Chevrolet brand, owned by General Motors, witnessed an increase of 139 per cent in sales for the reporting month against 3,937 units sold in the same month last year. The company sold 2,825 units of the newly launched compact car Beat, and 3,477 units of the Spark. The Cruze, a premium sedan, clocked 686 units in sales during the month.

P Balendran, vice-president, GM India said, "We are pleased to see such robust growth of all our car lines especially for the Cruze and the Beat, the response for which has been overwhelming. Besides, the increase in customer outreach through distribution network also helped sales."