Car sales gain momentum; Maruti, Hyundai and Honda among the biggest gainers - Economic Times

DELHI/MUMBAI: The automobile market continued to improve with top passenger vehicle manufactures registering modest growth in September and twowheeler sales racing ahead in strong double digits. Industry executives predict the momentum to pick up further in October, a festivals-heavy month. Despite the inauspicious period of Shradh keeping many Hindus away from showrooms for a fortnight in September, overall sales estimated to have gained for the fifth month running, sales numbers announced by companies on Wednesday indicate.

Industry sources put the estimated passenger vehicle sales for September at about 2.2 lakh units, a 6% expansion from a year earlier. The industry wholesale figures will be released later in the month by the Society of Indian Automobile Manufactures. The country's largest carmaker, Maruti Suzuki, posted a 9.8% expansion in September compared with a year earlier.

New models drove sales at Hyundai Motor India (14.5%) and Honda Cars India (45%). The launch of the new Scorpio helped Mahindra & Mahindra return to positive territory after almost a year and regain its No. 3 position. The local units of Toyota Motor and Nissan Motor also posted higher sales. Interestingly, industry sources said the expansion in September was led by utility vehicles, which grew a healthy 24% to approximately 51,900 units, as the passenger-car segment posted a flat number or a marginal decline.

"In this festive season, we are seeing a significant increase in first-time buyers and exchange buyers which is very encouraging as it will accelerate the positive momentum already being experienced in the last few months," said Rakesh Srivastava, senior vice-president for sales and marketing at Hyundai Motor India. While the industry has grown consistently over the past few months, experts say the growth is not inclusive and it has been largely led by the top four-five players and the ones with new models.

Volkswagen, General Motors, Ford Motor, Renault, Fiat and Tata Motors have posted lower sales in September. "There is some positive movement in the market due to the festival season and new entries. However, the complete recovery of the automobile industry is still some time away," said P Balendran, vice-president at General Motors India.

With a large part of September lost in the inauspicious period, the industry is looking forward to a bumper October with more than five major festivals falling in the month. "In month-on-month terms,October will surely see growth," said Subrata Ray, senior group vice-president at ratings firm ICRA. Optimistic of higher sales in October, Srivastava of Hyundai said: "We expect at least 15% growth in this festive season over the last year's festive season."

Unlike car makers, two-wheeler companies are already enjoying a dream run. Market leader Hero MotoCorp and the local two-wheeler unit of its erstwhile partner Honda Motor posted record numbers in the past month. Hero MotoCorp sales grew 30% to top 6 lakh units in September. Honda Motorcycle & Scooters sold 4.38 lakh units, up more than 33% from the year-earlier month and its highest monthly sales ever.

Bajaj Auto, which has had a tough year so far, came back with a 7% increase in sales, led by the new Discover 150 motorcycle. At TVS Motor, sales grew 27%. "September 2014 has been a phenomenal month for Honda," said Yadvinder S Guleria, senior VP of sales and marketing at Honda Motorcycle & Scooter.

"From Gujarat to Kolkata, we are witnessing overwhelming customer response this Navratras and expect the cheer to continue in October 2014 as well. Honda has created a record of highest festive retails crossing 1.75 lakh units in just the first 6 days of Navratras. The customer demand led by Dream series of mass motorcycles sales which have grown by 84% has exceeded all our expectations," Guleria said.