The Hindu Business Line : Auto cos post higher sales in June

New Delhi, July 1 Domestic auto companies managed to report higher sales despite interest rates and the looming threat of inflation on consumer’s pocket.

Beating all the macro economic blues for the third consecutive month of current fiscal, two-wheeler companies have managed to grow. Hero Honda, the top motorcycle maker, has posted a 16 per cent increase in domestic sales. Bajaj grew its motorcycles sales including exports at 8 per cent by selling 1,75,903 units. For TVS Motor Co, motorcycles sales increased 9 per cent at 51,409 units.

“Our strategy to tap into new markets in the semi-urban, rural and the upcountry areas has contributed to our expanding share in the two-wheeler market and thereby trigger growth in the industry amidst the continuing uncertainty over interest rates and the overall credit squeeze that the industry is going through,” said Mr Anil Dua, Senior Vice-President, Sales and Marketing, Hero Honda, in a statement.

According to an Axis Bank senior official, despite the two-wheeler companies showing growth, there was lot of polarisation in the market.

“Normally in monsoon, sales remain depressed. This year, there has been growth. But the market remains polarised. So while leading companies continue to show a phenomenal increase in sales, others find it difficult to come out of the impact of macro economic factors,” said Mr Sujjan Sinha, Senior Vice-President, Axis Bank.

For car makers, the exports markets have helped with both Maruti Suzuki and Hyundai Motor India posting a greater increase in overseas sales than in the domestic market. Maruti increased its exports by 23.5 per cent at 4,836 units and Hyundai registered a 61.7 per cent growth in its overseas sales at 18,301 units. Mahindra & Mahindra sold 12,662 units of utility vehicles and Logan as against 12,977 units in the same period last year in the domestic market.

“Domestic sales have shown growth. But the high discounts that are being offered by most car makers is a reflection of the tremendous pressure that companies may be facing under the macro economic factors,” said an auto analyst from B&K Securities India.