Vehicle sales remained robust through November, thanks to continued fiscal stimulus in the domestic market and healthy order-book for exports. And this sales momentum is unlikely to slow down in December, when manufacturers offer attractive discounts to push sales in the domestic market.
Analysts predict a slowdown, if at all, to come about after the March quarter when there is widespread anticipation of withdrawal of stimulus incentives and overseas demand also likely to weaken quite a bit.
Anand Rathi analysts Amit Kasat and Rohan Korde point out that India’s largest car maker, Maruti Suzuki India, recorded almost 7% sequential growth in November, the highest month-on-month growth for the company since FY04.
J P Morgan’s Aditya Makharia and Bharat Iyer anticipate Maruti sales to remain robust in December as well.
Maruti sold 87,807 units (52,711 units) last month; 76,359 were sold in the domestic market which translates to 60% growth. While the almost 67% overall sales growth appears spectacular, it must be seen in the context of a low base in November last year. Exports rose more than two-fold to 11,448 units. For the first time after many months, Maruti reported growth in every car segment (except the multi-utility vehicle category of Gypsy and Grand Vitara).
Not just Maruti, Tata Motors, Hyundai Motor India, Hero Honda Motors and TVS Motor Company also posted higher sales for November, helped by a low sales base in the year-earlier period when demand for new vehicles was stifled by a slowdown in the Indian economy.
Tata Motors’ total sales (including exports) of commercial and passenger vehicles stood at 54,108 vehicles (32,696 vehicles in November 2008), up 65%. Domestic sales were 50,114 units (30,556 units). Domestic commercial vehicle (CV) sales were 29,408 units (16,229), an increase of 81%. Of this, light commercial vehicle (LCV) sales stood at 16,901 units (62% up) while medium & heavy commercial vehicle (M&HCV) sales were 12,507 units, up 116% over November last year.
Macquire Equities’ Sanjay Doshi says that the CV business will continue to drive Tata Motors’ domestic market growth, with growth estimates pegged at 23% for FY10 and FY11. In passenger cars, sales are expected to stabilise on the back of new product launches and anticipated Nano ramp-up. But the utility vehicle (UV) segment is expected to remain subdued.
Hyundai reported its highest-ever monthly sales at 55,265 vehicles (43,020), up 29% from a year earlier. Domestic sales almost doubled 28,162 units (14,605), but exports fell 5% to 27,103 units (28,414). Among two-wheeler makers, Hero Honda reported a 32% rise in November sales to 381,378 units (289,426). It expects to cross four million units target this fiscal and November was the 11th consecutive month of over three lakh unit sales.
TVS registered 23% growth at 120,844 units (98,402), growing for the eighth consecutive month. Domestic sales were up 38% to 106,836 units (77,491) but exports declined to 14,008 units (20,911). Suzuki Motorcycle India sold 14,745 units (9,986), 48% up. India Yamaha Motor grew 2% at 17,055 units (16,701).
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