Auto Industry expects 25 per cent growth


The passenger vehicle industry is poised to record another good month in May, at an estimated 25 per cent growth in sales vis-à-vis the same month last year.

This came on the back of a low base, revival in demand and a larger number of models compared to the same period last year.


However, the absolute numbers are likely to be slightly lower than in April, when the industry registered its highest-ever growth of 33.9 per cent, at 1,82,182 units, in a decade.

“With new emission norms and the confusion pertaining to it, there have been fluctuations in sales in May and we expect the sales would be the same or slightly lower than April. However, it will continue to be significantly higher than May last year and we expect the growth momentum to continue,” said Vishnu Mathur, director-general, Society of Indian Automobile Manufacturers.

According to industry estimates, the passenger vehicle industry is expected to see around 1,75,000 units sold in May, compared to 1,40,823 units in May last year, when the industry had seen a marginal decline of 0.8 per cent.

“April-June, or the first quarter of any financial year, is traditionally a lag period with low sales, as people prepone their purchase during the Budget and because of an estimated price hike. While the price increase had happened this time as well, both April and May have been good for the industry because of the availability of several new products, including the Chevrolet Bear, Ford Figo, Volkswagen Polo and the new WagonR, all of which have helped the momentum to continue,” said Vaishali Jajoo, senior analyst, Angel Broking.

While official numbers would be released on June 1, it is estimated that Maruti would register close to 12 per cent growth in May, at around 80,000 units, compared to 70,785 units in May last year. Hyundai Motor India will see growth of 15-18 per cent, at close to 26,000 units vis-à-vis 23,503 units in May 2009. And, GM India will see growth in excess of 50 per cent, at around 8,000 units against 5,088 units in May 2009.

According to Arvind Saxena, director (sales and marketing), Hyundai Motor India, the overall economy had revived and demand had picked up compared to last year. So, he hopes to see a healthy first quarter in 2010-11. “We should see mid double-digit growth in May, with the i10 and i20 being in great demand,” he noted.

“While the wholesale numbers would be the same or slightly lower than April, retail sales are expected to be higher, as companies are offering discounts on several models,” said P Balendran, vice-president, GM India, adding the company would be selling around 8,000 units in May.