Auto sales zoomed in May on the back of high consumer confidence in light of the economy showing signs of a recovery. Maruti Suzuki and Hero Honda, both market leaders in their category sold the highest number of vehicles in May. Analysts expect the growth story in the auto sector to continue till Diwali.
India and China are the two fastest growing auto markets. The global automakers are increasingly tapping these markets to improve their profits.
For the first time, Maruti Suzuki sold over one lakh units in a month. The company’s total sales (including exports) stood at 1,02,175 units in May. Maruti Suzuki sold 90,041 units in the domestic market in May.
This is the highest ever domestic sales for the company in a month. India’s largest two-wheeler maker, Hero Honda sold 4,35,933 lakhs two-wheelers in May — the highest-ever monthly sales in the history of the company.
“It is not a story of only one month, the sales momentum which picked up in the January-February period is continuing,” said Ernst and Young, partner, Mr Pankaj Chadha. He said that auto sales were slow in 2009 as compared to 2008. “Both the carmakers and the consumers were deferring their decisions. Now the economy is back on track. People have got disposable incomes, there are new jobs and consumer confidence is back, which is reflected in high car sales.” Beating forecasts, India’s GDP grew by 7.4 per cent in 2009-10 and is expected to speed up to 8.5 per cent in the current fiscal.
Mr Chadha doesn’t see the increase in interest rates and how monsoon behaves impacting the sales momentum. “The automakers will be making a slew of launches in October-November period. Therefore, I expect the sales to grow high till then,” he added.