Car sales in India surged to a record for a second straight month in August on strong demand, despite rising prices and supply constraints. Figures released by SIAM show that car sales hit 160,794 units in August, up 33.2 per cent from the year before.
Commercial vehicle sales totalled 52,030, up 28.1 per cent from a year earlier. Total vehicle sales, which include utility and other passenger vehicles, rose 33 per cent to 256,257. “Demand for vehicles continues to surpass supply. This is despite the fact that most auto majors have hiked prices, passing on the cost impact to the consumers owing to the high commodity prices and changes in the emission norms,” said Angel Broking analyst Vaishali Jajoo.
Faced with supply constraints, car makers like Maruti Suzuki have cut exports to meet domestic demand. August exports of passenger vehicles slipped 7.4 per cent from a year earlier to 38,279 vehicles. Top utility vehicle maker M&M has also been hurt by component shortages, according to Macquarie Securities analysts.
Ford Motor Co. expects India to be the world’s third-largest auto market by decade’s end, after China and the U.S. Like other global auto majors, it’s pushing hard to gain market share from industry leaders Maruti Suzuki, Hyundai and Tata Motors. Ford plans to launch 8 more India models by the middle of the decade on the heels of its successful Figo launch.
Strong industrial production and economic growth helped Tata Motors, India’s largest commercial vehicle maker. Its medium and heavy commercial vehicles rose 34 per cent over last August.
“A normal monsoon season, improving consumer sentiment and an overall recovery in the economy should benefit auto sales,” said Macquarie analyst Sanjay Doshi. “We expect sales numbers to remain healthy at least until the festive season, as inventory levels are below average. Increasing interest rates can affect sales in the second half of the fiscal year.”