India’s carmakers continued to see high growth amidst a fast improving economy. Car sales surged in November, boosted by a low base effect from last year and possibility of price rise next year as the government contemplates an exit from the tax cuts it offered after the global economic downturn surfaced last year.
Nearly all the players saw buoyant growth as sentiments and economic outlook improve. Market leader Maruti Suzuki continued to hold the sales momentum, recording a whopping 60% increase in sales to 76,359 units.
Performance of Korean car maker Hyundai saw even more exhilarating with domestic sales jumping 93% on an annual basis to 28,162 units in November 2009. This was Hyundai’s highest year-on-year growth in its decade-old Indian operations. While the company’s management accepts that the low base effect from last year did help boost the number, it also insists that overall economic scenario, too, has improved sharply compared with this time around last year.
Tata Motors, too, witnessed a strong November with sales recording a growth of 48% to 18,480. Another major auto player Mahindra & Mahindra saw its sales nearly double to 15,193 units in November 2009 compared with the same months last year.
Analysts, however, point out that the high growth was also contributed by logged demand in wake of slower production in the last few months as car makers were caught facing a sudden surge in demand. The expectations that excise duty will go up from 8% in the forthcoming budget as the government withdraws the stimulus package resulting in car prices going up, have also prompted many consumers to buy now. Nonetheless, the high growth could be sustained in case the economy continues to recover strongly, as has been signalled by the much higher-than-expected second quarter GDP numbers.
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