The Hindu Business Line : Auto sales sustain momentum in May

New Delhi, June 10 Domestic auto sales showed resilience for the second consecutive month in the current fiscal as most segments reported growth, according to the data released by the Society of Indian Automobile Manufacturers on Tuesday.

The two-wheeler industry, which was the worst hit in the last financial year, seems to have emerged out of its sluggish sales period. Motorcycles sales rose 7 per cent last month as compared with the same period in the previous financial year.

Even as the availability of two-wheeler finance remained tight, Hero Honda, the leading bike maker superseded the industry growth by recording a 10.33 per cent surge in sales at 2,97,387 units. In contrast, Bajaj sales remained stagnant at 1,30,068 units. An increase in demand from women drivers and a relatively less dependent segment on finance, scooters and scooterettes sales rose 6.36 per cent at 97,905 units.

“The squeeze in finance has led to more Hero Honda customers opting for cash purchases than on loan. So this year should be better than last year,” said a city based Hero Honda dealer. Moreover, with the hike in fuel prices, consumers would prefer using a two-wheeler for shorter distances, he added.

CV SALES

Commercial vehicles also recorded a healthy increase in sales. The light commercial vehicle segment grew 6.83 per cent at 16,628 units. Purchases of medium and heavy commercial vehicles recorded 5.46 per cent increase to 18,666 units.

Despite the encouraging sales, the industry association has given a cautious outlook. “Sales have been decent in the first two months of the fiscal. However, due to high interest rates, restricted finance for vehicle purchases, spiralling prices including the recent fuel price hike would make the coming months challenging for the industry,” said Mr Dilip Chenoy, Director General, SIAM.

Maruti Suzuki, the top car maker reported a 16.13 per cent growth in sales, putting its growth numbers at par with the industry rate. Hyundai Motors at 24,506 units grew 47.47 per cent. Tata Motors also grew marginally last month. But, Honda Siel Cars India remained an exception as despite the launch of a new model of its premium sedan Accord, the company posted a 17.21 per cent dip during the month after selling 3,670 units.

“This is the time when families go on holiday. So sales remain dull. Accord has received a fabulous response. Since the mileage of the cars in the segment is lower than compact cars, there is some impact in the consumer sentiment in turn affecting sales. Of course, interest rate continue to be a discouraging factor as more expensive the car and higher the loan, EMI payments also go up,” said a Honda car dealer.

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