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Car sales hit fast lane in Narendra Modi's 100 days

Overall sales jump 18%; Maruti, Hyundai, Honda report excellent monthly sales; M&M, Tata, Toyota, Ford, GM see drop in volumes

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Car sales rose by 17.9% in August, driven by top three manufacturers -- Maruti Suzuki, Hyundai Motor India and Honda Cars India.

Barring the top three, wholesale dispatches of most other car makers declined during August over the same month last fiscal, as per the data released by top nine manufacturers on Monday.

August was also the third straight month for a double-digit growth in car sales.

Led by compact and utility vehicle segments, wholesale dispatches of Maruti Suzuki – the biggest carmaker – grew by 29.3% in August to 98,304 units compared to 76,018 units in August last year.

Hyundai Motor India – the second-largest car company – sold 19.2% more cars in the domestic market in August compared with same month last year, backed by new launches like Elite i20, Xcent and the Grand.

Rakesh Srivastava, senior VP- sales and marketing, Hyundai Motor India said in a statement, "We maintain a cautious optimism for a good festive season on the strength of new products, increase in demand for petrol cars and improving customer sentiments."

Honda Cars India, which surpassed the sales of Mahindra & Mahindra (M&M) last month, becoming the third-largest manufacturer, continued the momentum with a growth in domestic wholesales dispatches by 88%.

Though the year so far has seen a positive momentum in car sales, experts said the volumes are mainly sentiments driven and the recovery in the economy will help in sustaining the growth.

Apart from Maruti Suzuki, Hyundai, Honda Cars and Nissan Motor India, most players, including Mahindra & Mahindra, Tata Motors, Toyota Kirloskar Motor (TKM), Ford India and General Motors saw drop in volumes during the month.

Volumes of home-grown manufacturers – M&M and Tata Motors – fell 11% and 5%, respectively. On the other hand, TKM sales declined 6.5% and Ford India fell 15% despite new launches.

Tata Motors on Monday said its sedan sales grew 106% year on year, on account of the launch its latest sub-4 meter sedan – Zest. The company said on a social media website that Tata Zest has received an order pipeline of 10,000 for the next two months. Revotron variants (petrol) have a waiting period of 4-6 weeks and the diesel AMT three months.

"We are also seeing a positive rub-off on sales of other brands in our dealerships. Seeing the upsurge in demand, we are gradually ramping up the assembly line and are gearing up for the festive season going forward," said Ranjit Yadav, president, passenger vehicle business unit, Tata Motors.

With the upcoming festive season and new launches in pipeline, industry expects sales to get a further boost.

Kumar Kandaswami, senior director, Deloitte Touche Tohmatsu India said in a statement, "The spurt in growth seems to be more on account of the prevailing sentiment rather than on hard economic data, at the moment. There may be a tapering off of demand if the economic parameters remain weak in the coming months."

If inflation goes down and if investment begins to flow into the important sectors triggering growth in disposable income, the growth in demand for cars will be sustained, he said. "The spurt in sales before the festival season will, therefore, be dependent upon the demand drivers improving significantly in a timely manner."

The new government and signs of recovery in the economy have helped in car sales come out of the two -year long slowdown in sales.

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