Friday, January 1, 2010

Auto industry registers robust sales in December

India’s auto industry ended 2009 on a strong note with car and two-wheeler makers reporting robust growth in December sales as increasing economic activity and easy availability of loans prompted buyers to rush to dealerships.

December is traditionally seen as a weak month for sales as customers prefer to wait for the new year to make purchases as cars bought in December attract lower resale prices than than those bought a month later. However, in the past few years car makers have rushed to attract buyers with discounts and other rebates to shore up December sales.

Maruti Suzuki India Ltd, the country’s largest car maker reported a 36% jump in sales. The company sold 71,000 units in December, compared with 52,029 units a year ago.

Sales at rival, Hyundai Motor India Ltd, rose 42% to 22,252 units. Mahindra and Mahindra Ltd clocked the biggest percentage jump, with sales rising 122% to 22,754 units.

Tata Motors Ltd did not release its numbers.

The growth was also helped along by the base effect when muted growth in one month leads to the next year’s numbers looking stronger then they would have otherwise. Car and two-wheeler sales started falling in October 2008 and continued to do so till February.

Smaller players such as General Motors India and Skoda Auto also reported brisk growth. Sales at General Motors doubled to 8,258 units. Significantly, the Spark, its small car, accounted for 4,147 units. It plans to further strengthen its offering in the small car segment with the launch of the Chevrolet Beat at this month’s New Delhi Auto Expo. Skoda sold 1,113 units compared with 732 a year ago.

Car makers also benefited from buyers advancing purchases due to price hikes, which several companies have said they plan to do in the next few months. Some, such as Ford India Pvt. Ltd, have already announced an increase in prices from January.

Among two-wheeler companies, Hero Honda Motors Ltd ended the year with the company selling in excess of 300,000 units every month in 2009. It sold 375,838 units in December, a 42% increase over the year-ago period. TVS Motor Co. Ltd sold 102,479 two-wheelers in December, compared with 72,355 a year ago, a growth of 42%. India Yamaha Motor Pvt. Ltd’s sales fell 15% to 13,612 units.

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