Car sales zip past rate hike, up 16% in April

Bucking the impact of steep interest rates, car companies managed to bring customers back to their showrooms after a dismal performance in March.

Passenger car sales for Maruti, Honda and General Motors, which account for 60 per cent of the market, jumped 16 per cent in April over the same month last year.

High demand for recently-launched cars such as Swift Diesel and Zen Estilo, and renewed demand for Maruti 800, which had seen sales falling, did the trick for Maruti Udyog. Maruti-800 sales, which increased for the first time in four months, stood at 6,324 units in April this year, against 5,761 units in April 2006.

The company also dispatched its yet to-be-launched sedan, SX4 (slated for May 7), to dealers.

"The sales increase was due to innovative schemes launched in collaboration with banks and financial institutions, which negated the impact of high interest rates. Customers are paying almost the same interest as last year, as dealers, along with Maruti and banks, have shared the interest burden," said a Delhi Maruti dealer.

Added Vaishali Jajoo, an analyst with Angel Broking, "Sales were better than expected. Due to the rising interest rate, we had estimated growth of 10-12 per cent in April, but the low interest rates the companies offered helped them maintain steady sales."

For General Motors India, the small car Spark, launched by global chief Rick Wagoner last month, accounted for over 26 per cent of sales, contributing significantly to the 22 per cent sales growth this month.

Said P Balendran, vice-president, GM India, "Despite being launched only in Delhi and Indore, Spark has received overwhelming response in a brief period of 13 days. This demonstrates customer confidence in our products and the steady sales jump despite the adverse impact of the rising interest rates."