Despite price jump undertaken by most auto makers, demand remains strong.
Auto numbers for March have started coming in and the strong volume growth recorded by most players — both passenger car and two-wheeler makers — has surprised most analysts. Overall, the volumes have grown by 18-20 per cent across segments. Maruti has surprised the street yet again by posting a year-on-year sales growth of 28.2 per cent in March.
The company sold 121,952 units last month, as compared to 95,123 units sold in the same period last year. This figure is higher than the 106,000 units that analysts expected the company to clock. The jump in number can probably be due to the discounts the company has been giving, there is no doubt that Maruti’s stronghold on the passenger car market remains.
On the other hand, another large auto player, Tata Motors, sold a total of 83,363 vehicles in March, a year-on-year growth of 11 per cent, as against the 75,129 vehicles sold in the same period last year. However, the company’s month-on-month growth is healthier at 32 per cent. The company’s cumulative sales, including exports, for 2010-11 stood at 803,322 units, reflecting a 25 per cent increase over last year.
The company’s cumulative sales and distribution offtake of passenger vehicles in the domestic market for the financial year stood at 319,562 units (298,496 Tata + 21,066 Fiat), as against 259,656 (234,929 Tata + 24,727 Fiat) in the previous financial year, which reflects a growth of 23 per cent. However, what worries analysts is a 40 per cent year-on-year dip in sales of Indica in March (6,937 units) and a 14 per cent dip in cumulative sales (97,845).
Due to increased competition in the diesel segment, the Indica sales have been under pressure. Analysts are hoping the new Indica V2 will revive sales. Nano sales have, however, zoomed by 85 per cent annually and cumulative sales for the financial year stand at 70,432 units. It is the same story for Mahindra & Mahindra, which has posted a 19 per cent growth in vehicles, while tractors have grown by 23 per cent yearly.
Despite most automakers have undertaken price rise of one-two per cent in the last one month, demand for vehicles has not declined. This is heartening for most auto analysts, as the consensus was that demand would fall as cost of ownership would increase. But many believe consumers have made hasty decision to buy, anticipating a further price rise. The auto story, which has been the harbinger of India’s consumption play, seems to have shown remarkable resilience in the 2010-11 financial year.
