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Automobile industry: Vrooming ahead

S. Muralidhar

THE passenger car segment's growth expectation for this year has changed from one of resignation — a slow 3-4 per cent growth — to a more optimistic 9-10 per cent growth. The change in sentiment has come after the pre-festive season boost that car sales received during October this year.

On the whole, the automobile industry, including commercial vehicles (CVs), cars, three-wheelers and two-wheelers segments, is expected to grow at approximately 22 per cent for the full year ending March 2003. The highest growth will be in the goods-carrying light, medium and heavy CVs, passenger-carrying LCVs, goods-carrying three wheelers, motorcycles and step-throughs.

The automobile sub-segments that will act as a drag on the growth of the industry will be the multi-purpose vehicles or van-type vehicles, scooters, scooterettes and mopeds, all of which will close with negative growth rates.

Excluding the three-wheeler segment, exports of which, in absolute terms, is only a quarter of the total two-wheeler exports, the latter will close the year with the highest growth in exports. For the seven-month period ended October 2002, total two-wheeler exports at 96,627 units had grown by 67.26 per cent. Of this, motorcycles constituted 68,817 units, up by 132.62 per cent compared to the corresponding previous period.

The industry's sales trend for April-October throws up a number of interesting points. The passenger car segment had an incremental 3.5 per cent addition to the cumulative growth percentage during October alone. So, from a four per cent increase in cumulative sales till September 2002, the growth touched 7.65 per cent in cumulative sales by end October.

Also, despite the addition of the Scorpio from Mahindra & Mahindra and the new Qualis from Toyota Kirloskar Motors, the growth in the utility vehicles (UVs) sub-segment was only 3.6 per cent. This obviously means that while the total size of the UV market has not increased much, and there is rampant poaching amongst the existing and new models.

In the CV segment, thanks to laws on emissions and due to the increased demand for privately operated public transport, the demand for LCVs has been increasing consistently. Total LCV sales, of both passenger and goods carrying, topped at 41,140 units for the seven-month period ended October 2002.

This represented a growth of 39 per cent over the sales of the corresponding period last year. Also, while the domestic sales of medium and heavy CVs grew by a modest 6.25 per cent during this period, their exports grew by about 118 per cent over last year's sales during the same period.

On a similar note, cumulative sales of three-wheelers for the April-October period grew at a mere 3.91 per cent at 98,190 units. However, their exports grew by a whopping 262.3 per cent. Exports of passenger-carrying `autorickshaws' grew from 6,713 units during the same period of 2001-02 to 24,321 units this year.

Exports are expected to continue growing at a brisk pace, what with the reported opening up of new markets such as the US. The converse seemed to be the trend for goods-carrying three-wheelers, which recorded a 56.9 per cent jump in domestic sales, but whose exports fell by 24.9 per cent.

In the two-wheelers segment, motorcycles continued to rule the roads and recorded a huge 40 per cent jump in sales during the seven-month period ended October 2002.

Cumulative exports of motorcycles also vaulted by over 132 per cent during this period. Further, despite a few important scooterette launches, such as the Honda Dio and the Kinetic Nova, the scooters and scooterettes segment witnessed a continued erosion of demand. Cumulative sales in this sub-segment totalled 5,17,652 units during the period ended October, down by over 9 per cent from the corresponding previous period.

The shift in demand from scooters and mopeds to motorcycles continues to strengthen.

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