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India's Passenger Auto Sales rise to a Monthly Record
NEW DELHI - Automobile demand in India continued on a scorching drive, with car sales touching a monthly record in February, as customers advanced purchases on expectations of an increase in vehicle excise taxes by the federal government.
Toyota Kirloskar Motor's Koji Nagata poses during the
launch of Etios Sedan in Ahmedabad.
Sales also gained as buyers shrugged off concerns of increased borrowing costs and higher vehicle prices in the world's second-fastest growing major economy.
Local car sales jumped 23% from a year earlier in February to 189,008 vehicles, showed data issued Wednesday by the Society of Indian Automobile Manufacturers, an industry lobby group. The figure is more than January's all-time monthly record sales of 184,332 cars.
Sales received a fillip from the introduction of new small cars as well as sedans in the recent past, such as Ford Motor Co.'s Figo, Toyota Motor Corp.'s Etios and Hyundai Motor Co.'s upgraded i10 models.
India has remained one of the fastest-growing markets for automobiles globally as easier availability of loans, rising personal incomes of the country's estimated 350 million middle class population and a slew of new models continue to attract new buyers.
The sustained expansion of the market, in the midst of the global economic downturn that shrank demand in the U.S. and Europe, led existing players such as Suzuki and Hyundai to introduce more models and expand capacities as new companies such as Nissan Motor Co. and Volkswagen AG made their forays.
The local auto industry was expecting the government to raise excise tax, levied at vehicle dispatches from factories, by two percentage points in its budget for the next fiscal year that starts April 1. A tax increase would have forced auto makers to raise vehicle prices. But the budget, announced Feb. 28, kept the tax unchanged.
The government had cut excise tax by six percentage points in 2008 and 2009 after the global economic crisis hit demand for new vehicles. The tax was raised by two percentage points to 10% on Feb. 28, 2010.
Jamshed Dadabhoy and Arvind Sharma, Mumbai-based analysts at Citigroup, said in a recent report that there could be "slight softness" in March sales volumes because of higher inventory levels at auto makers, which were expecting an increase in excise tax.
SIAM said sales growth in February was lower than that witnessed in previous months of this fiscal year through March.
"Except car sales, we have seen some moderation in February and that should continue for some time," said Vishnu Mathur, director general of SIAM. "It is difficult to sustain such high growth rates and the next [fiscal] year should see some moderation."
Mr. Mathur said, however, that total local vehicle sales in the current fiscal year are expected to exceed SIAM's earlier prediction of 18%. "Sales should grow between 26% and 27% this [fiscal] year."
Maruti Suzuki India Ltd., a unit of Suzuki Motor Corp. and India's largest car maker by sales, sold 87,851 cars locally, up 19% from a year earlier. It produces eight small car models, including the Swift, A-Star and Suzuki Alto.
Hyundai Motor India Ltd., the second-largest car maker by sales, sold 32,503 cars in February, up 5% from a year earlier. February car sales at Tata Motors Ltd. jumped 19% to 27,272 vehicles.
In February, sales in the motorcycle segment increased 21% to 776,051 units, with market leader Hero Honda Motors Ltd. recording a 23% growth to 429,928 units. Second-ranked Bajaj Auto Ltd. posted a 17% increase to 202,145 motorcycles, while sales at TVS Motor Co. rose 14% to 52,650 motorcycles.
The scooters segment posted a 27% increase to 185,460 units in February. The gain was helped by higher sales of Honda Motorcycle and Scooters India, TVS Motor and Suzuki Motorcycle India Pvt.
Local sales of trucks and buses, in addition grew 11% in February to 64,057 units as companies such as Tata Motors, Ashok Leyland Ltd. and Mahindra & Mahindra Ltd. recorded rises.
Local truck and bus sales at Tata Motors grew 7% to 36,789 units while those at Ashok Leyland rose 27% to 8,984 units.
http://online.wsj.com/article/SB10001424052748703560404576189663464213324.html