May auto sales at 14-year high, smooth ride ahead

Continuing their upward journey, automobile sales in May grew 30% at 12,08,851 units as compared to 9,29,917 units for the same month a year ago, according to data released by the Society of Indian Automobile Manufacturers (Siam) on Wednesday. This is the highest-ever sales jump the industry has recorded for May since 1996.

The numbers junked the largely-held notion that May typically records lower numbers compared to the rest of the year.

The director-general of SIAM Vishnu Mathur said the trend looked positive in the coming months as well and the high sales figures reflect the tenacity of the economy. “The per capita income has almost touched $1,000 and that’s a magical figure, which is the threshold for automobile demand,” he said.

Led by the country’s largest carmaker Maruti Suzuki, passenger car sales surged a whopping 30.5% to 1,48,481 units against 1,13,810 units last year. Maruti sold a total of 76,120 units in May against 62,878 units last year.

Hyundai Motor also saw marginal increase in sales at 27,151 units compared to 23,501 units last year. Tata Motors’ total sales rose to 18,618 units from 12,838 units in May 2009.

The two-wheeler segment spearheaded by motorcycle sales jumped 25.8% in May to 7,25,311 units against 5,76,537 units in the previous year, on the back of burgeoning economy and easier financing opportunities. The world’s largest two-wheeler maker by volumes Hero Honda Motors grew 11.74% to 4,01,320 units in May. Pune-based Bajaj Auto’s sales increased 68% to 1,91,726 units, while Chennai-based TVS Motor Company posted a 21.21% sales growth at 52,319 units in May. Sales of Honda Motorcycle & Scooter India (HMSI) jumped 52.24% to 55,110 units.

Scooter sales in May jumped 45.45% to 1,57,509 units against 1,08,291 units sold last year. HMSI’s scooter sales increased 28.03% at 76,980 units, while TVS Motor’s scooter sales jumped 40.19% in May to 30,567 units. Hero Honda’s scooter sales jumped 23,738 units, an increase by 61.21% from last year.

Despite the robustness in the auto sales, Mathur warned that if the monsoons turn weak, then it could spell gloom in the industry. He also pointed that rising raw material costs are a concern for industry. “If the government takes steps to control the money supply, then at some point of time interest rates will be under pressure. We have to track it very carefully,” he added.

Sales of trucks and buses, a barometer of economic activity, jumped 58% to 48,580 units in May from 30,803 units a year ago. Light commercial vehicle sales increased 37.94% in May to 25,688 units from 18,622 units. Medium and heavy commercial vehicle sales rose 87.93% to 22,892 units compared to 12,181 units in the same month last year.

Exports from the industry also touched a record of 1,79,130 units, the highest-ever in May. In May 2009, total exports stood at 1,19,749. Motorcycle exports grew at 49% at 1,16,832 units, while passenger car exports grew 10% at 32,649 units. “Sales in export markets were very impressive. It is despite the fact that the scrappage incentives offered in some European countries for passenger cars are over,” Mathur added