Car sales entered the New Year on a strong note as low interest rates and positive customer sentiment continued to fuel demand for new vehicles. Fear of price hikes following withdrawal of stimulus incentives in the Budget also contributed to higher purchases in January.
Mahindra and Mahindra, Tata Motors, Hyundai and General Motors saw record growth in monthly numbers, while market leader Maruti Suzuki continued its strong run. Hyundai’s domestic market sales were up 41% at 29601 units, the highest monthly number since the company started selling cars in India in 1998. The company said the government should continue with its stimulus package, comprising lower manufacturing duty and easy interest rates, to maintain the tempo.
Mahindra and Mahindra too had record growth as its utility vehicle sales in January stood at 20,332 units against 13,397 units, led by the Xylo multi-utility vehicle. “The momentum remains strong and the Xylo is doing well for us,” M&M's automotive sector president Pawan Goenka said.
Maruti’s sales were up 21% in the domestic market at 81,087 units against 67,005 units in January 2009. The company’s heavyweight portfolio of small cars, that includes models like Alto, Wagon-R, Swift and Ritz, grew 25 per cent.
Rakesh Batra, who tracks the auto sector at Ernst & Young, said the revival in economy and the low interest rates were among the positives fuelling demand. “The consumer sentiment is very positive,” he said, adding, that concerns over withdrawal of stimulus package that can see car prices go up was also among reasons pushing numbers. “There could be a case of preponement of purchases.”
Tata Motors said it sold 26,245 units in the month against 18,331 units in January last year, a growth of 43%. General Motors, which launched a new compact car Beat in January, sold 9,421 units, showing a growth of 139%. The sales comprised 3,477 units of the Spark mini car, 2,825 units of Beat and 686 units of Chevrolet Cruze sedan. The company is ramping up production at its two plants as it expects demand to remain robust.