Car sales show momentum

India's passenger car market picked up steam ahead of the looming spectre of an oil price hike. Top carmakers Maruti Suzuki India Ltd (MSIL), Hyundai Motor India Ltd, General Motors and Mahindra and Mahindra have all reported healthy rise in sales in May. Honda Siel Cars India (HSCI) however, was an exception as its sales slid by 18 per cent during the month.

Industry officials, however, feel that the upward movement could be short-lived.

'The steady increase in inflation has lead to a sudden surge in input costs for all manufacturers' said P Balendran, Vice President, GM India. 'The fear of impending increase in fuel prices, rising interest rates and threat of the global reversionary trend are affecting the growth of the sector.'

As of now, Indian carmakers are reaping benefits of a surge in demand in the new financial year. In May 2008, Maruti's domestic sales grew by 14.6 per cent over May last year to, driven by a steady growth in sales of its SX4, Swift D'zire and Esteem models, which grew by 18.7 per cent to 5946 in the month of May. The three models have sold 49335 cars in the last year.

Hyundai, India's second largest in terms of passenger car numbers, continued to benefit from the demand for its latest offering i10 clocking a 51.1 per cent rise compared to May 2007. i10 hatchback has sold 50,000 units in the first 5 months of 2008.

General Motors India registered a comparatively subdues growth due to high base effect from last year. The company had launched a series of models in the small car segment like the Chevrolet Aveo U-VA and Spark which had resulted in its base getting higher.

Last month's sales comprise of 1667 units of Chevrolet Tavera, 1214 units of Chevrolet Aveo, 383 units of Chevrolet Optra, 2250 units of Chevrolet Spark and 275 units of the newly launched Chevrolet Captiva.

Mahindra& Madhindra also performed well in the domestic market as its Scorpio and Renault Logan continued to do well in the market. The company clocked sales of 19,296 vehicles, as against 17,079 vehicles in May 2007, registering a growth of 13 per cent in the domestic circuit.

Two wheeler comapnies also did well in May as the top four two wheeler companies -- Hero Honda, Bajaj, TVS Motor and Honda Motorcycle and Scooter India -- registered single digit growth during the month. Hero Honda led from the front with a 9.5 per cent growth followed by Bajaj at 7 per cent, HMSI at 8 per cent and TVS motor at 4 per cent.