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November subdued, December good for car makers

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After a subdued November, domestic auto sales were back on track in December. Auto sales rose 30.5 per cent as cash discounts and other offers reignited consumer demand.

Total sales climbed to 1,305,872 units in December from 1,000,500 units a year earlier. In November, the industry had posted a 17.8 per cent rise.


The passenger vehicles category, comprising cars, sport utility vehicles (SUVs) and multi-purpose vehicles, reported the second-highest growth in the industry. Passenger vehicle sales rose 29.85 per cent to 193,685 units from 149,097 units a year ago.

Maruti Suzuki, the country’s largest car maker, logged the highest growth in terms of volume. It dispatched 26 per cent more at 89,469 units during December.

Similarly, Hyundai Motor India, the country’s second-biggest car maker, posted a 17.6 per cent rise in dispatches at 26,168 units, while Tata Motors, India’s third-largest car maker, dispatched 24,592 units, an increase of 30.3 per cent.

Two-wheeler sales rose the most in December at 1,006,545 units, a jump of 31.1 per cent over 767,796 units sold a year earlier. The growth was largely aided by Hero Honda and TVS Motors, which logged 32.8 and 45.7 per cent growth, respectively, in sales.

The Society of Indian Automobile Manufacturers (SIAM), the apex body of automobile manufacturers, emphasised the need for continuation of the excise duty benefit for a sustained development.

SIAM President Pawan Goenka said, “The automobile industry contributed 86 per cent more excise (to the government) than last year, accounting 26 per cent of the overall excise kitty. There is no need to roll back to the levels of the pre-stimulus package days.”

In an attempt to spruce demand, the government had reduced excise duty on compact cars to eight per cent from 12 per cent in 2008. This was later raised to 10 per cent during last years’ Budget when demand was on an upswing. Bigger cars and SUVs attract 22 per cent excise duty.

SIAM officials have already met finance ministry officials, according to Goenka. “We have had discussions with the government and are quite encouraged by the response and we have been promised that there would be a fair look at the points that we have raised,” said Goenka.

Commercial vehicle makers, too, posted a healthy growth of 27.3 per cent in December. They sold 61,880 units compared to 48,614 units a year earlier. Sales of passenger and commercial three-wheelers grew by 25.05 per cent to 43,762 units, against 34,993 units in the year-ago period.