The end of the financial year and purchases ahead of a price rise boost sales.
Domestic automobile companies reported robust sales in March 2010, with all the segments doing well. While year-end sales helped, some boost came from customers advancing purchases ahead of a price rise due to tighter emission norms. In some cases, the base effect distorted growth rates. Nevertheless, overall figures were better than in February 2010.
Among listed two-wheeler companies, Bajaj Auto performed the best — its motorcycle sales rose 85 per cent year-on-year, led by demand for Discover and Pulsar bikes, though some of the spurt was due to the low base of last year. TVS also saw its two-wheeler sales rise almost 25 per cent. While Hero Honda’s sales grew a healthy 17.3 per cent, Citi’s analysts noted in a recent report, “Hero Honda continues to cede market share to TVS and Bajaj, and we expect the trend to continue.”
The ongoing economic recovery saw commercial vehicle (CV) makers post excellent growth, aided by last year’s low base. Nevertheless, Tata Motors’ 20 per cent and Ashok Leyland’s 32 per cent sequential growth in medium and heavy CVs (up 69 per cent and 112 per cent year-on-year, respectively) indicates strong (freight) demand. In light CVs, too, robust demand saw Tata Motors sales rise 35 per cent in March.
In passenger vehicles, Maruti disappointed on the domestic front (A2 segment volumes declined), even as its overall numbers were in line with expectations, noted Citi’s analysts.
“The explanation from Maruti’s management for the weak performance was that sales of Euro-III versions of Alto and Wagon R were curtailed, as in 11 cities, only Euro-IV variants will be sold. April volumes should provide an indicator,” say Citi’s analysts.
The rising competition (from Ford, GM, Volkswagen) could have added pressure. Also, last year’s high base (March 2009 volumes reported the highest growth in 2008-09) was partly responsible for the subdued numbers. Positively, higher sales of Maruti 800, Eeco and D’zire, along with robust exports (up 32 per cent), helped Maruti report an 11 per cent rise in March sales.
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Tata Motors’ 17.2 per cent year-on-year rise in passenger vehicle sales (excluding Fiat) for March was helped by Indigo Manza and Nano (4,710 units), even as its utility vehicle (UV) sales fell 22.7 per cent.
Mahindra & Mahindra did well. While its tractor sales grew 54 per cent, three-wheelers sales jumped 90 per cent. But, its UV sales rose just 5 per cent.
Analysts expect automobile sales to remain healthy across segments, even as companies have raised prices and interest rates are showing an upward bias. They believe the strong economic recovery will sustain robust growth.