The “Terrible Recession” seems to be a small blip on the big radar called Indian economy, at least for a few sections of the people. For, it was not too far when the big monster called “Recession” literally brought many world major economies crashing down. Many countries, including the industrially advanced European Union members, are still struggling and looking ways and means to come out of the big economic slump. Perhaps, the Indians should feel lucky about the fact that the economy had showed significant recovery in a very short span of time. The recovery happened quick and fast. Despites the problems like sky-rocketing prices and several other internal troubles, the Indian economy is booming and back on the rails for sure. The confidence is back and the adventurous few are even willing to go for a nice ride on the fast track.
Amazing indeed the turnaround story! Market analysts say a country’s growth path can be ascertained by the number of wheels that drive on its roads. If that’s the criteria, then Indian economy has really emerged out of the blues, and again looking to shift gears, quick and fast. For, the number of car and two-wheelers sales that recorded in the last few months tells us altogether a different story.
The reasons for the record automotive sales may be many. Be it the insatiable urge to own a car or a two-wheeler or the bitter experiences caused by the ever unreliable public transport system, or even the busy lifestyle, impending deadlines, whatever be the cause, now more and more Indians are thinking in the lines of having their own transport facility at their disposal. And this seems to be helping the automotive companies, which are registering brisk sales. Despite the fact that the economy is yet to recover fully, and price rise still causing more and more problems for the average middle-class person, the Indian carmakers have registered an impressive sales in the last few months. Particularly in July this year, almost all the leading automotive companies have posted good sales and are showed confidence of furthering up their growth charts in the months to come.
Introduction of new models by almost all the leading car makers may be a good lure for the customers. Reduction of car prices and availability of low interest loans also played their part. So, be it the largest car manufacturer Maruti Suzuki or its competitors Hyundai, Tata Motors, Ford and General Motors, all managed to record good sales in the last month. Similarly, impressive performance by luxury carmakers and bike manufacturers also indicate that the Indian auto industry will clock record-breaking sales in the year ahead.
So, what makes the people run for cars, two-wheelers or even the bigger things like luxury cars, sports cars and bikes. One big thing being, the economy is back on positive growth. Certainly it gives a lot of confidence to go for bigger things. Take the case of software professional J Srikumar. Not that Srikumar had lost his job during the recession. But things were not going on his way at least. Several big software companies have asked its employees to take the salary cuts, perhaps it may be very painful thing to happen. But at a time when several other big companies were giving pink slips and closing down their shops, it was better as the company has shown the decency to still keep its employees on its rolls. There is always light at the end of the tunnel, they say. So it happened and things are looking better now. “As things are looking positive again, I thought it is the right time to go for the new addition in my family” Srikumar said. There is yet another big reason for Srikumar to buy a car at this juncture. For, his wife is pregnant and is expected to delivery a baby next month. What can be a better time than buy a car now, thought Srikumar. Perhaps, every new purchaser might be having his own story to tell like Srikumar. But the automotive companies are not complaining either.
For record, India’s leading car manufacturer, Maruti Suzuki-India reported a 29.18 per cent rise in its sales in July this year, which in actual numbers, the company had sold more than one lakh cars this July. This is no mean achievement at a time when the economy is on a recovery path after the pain-staking recession period. According to Maruti officials, this is the second time in this fiscal that the compnay’s monthly sales figure has crossed the one-lakh mark. While its sales in the domestic market stood at 90,114 units, up by 33.45 per cent, its exports could only grow by 1.87 per cent at 10,743 units.
Similarly, another car manufacturer, Tata Motors too reported impressive sales figures in the passenger vehicle sale category by selling as many as 27,864 units, a jump of as much as 62 per cent compared to last year. This, according to officials, is the highest-ever sales achieved by the company so far. In July, the Tata Motors sold 9,000 units of its world's cheapest car ‘Nano', while its exports went up by 73 per cent to 4,241 units. Another leading car manufacturer Hyundai Motor India also showed rise in sales, not as significant though. Hyundai could achieve a growth of only 10.7 per cent in July this year at 50,411 units — 28,811 units in domestic market (24.2 per cent growth) and 21,600 units in exports (down 3.3 per cent).
But, it’s a different story for the US-based carmaker Ford, which showed a good growth rate thanks to its latest launch. According to officials, Ford sales up thanks to its new small car Figo that hit the Indian market a couple of months ago. Thanks to its small car Figo, Ford company sales went up by four times to 8,739 units as compared to 2,146 units in the same period last year. Since its launch in March, the company has received 29,000 bookings for Figo so far, while it has sold almost 47,000 vehicles this year. Similarly, General Motors also saw its sales to go up by 45 per cent in July at 7,124 units, mainly due to its small cars Spark and Beat. Another interesting addition to the list of small cars last month was Micra from Nissan Motor India which sold as many as 1,000 units in just 15 days, a significant achievement indeed.
No 2 in the world
It seems the Indian automotive story has hit the top gear again. Particularly, because of this reason, several big automotive companies are eyeing the Indian market. And to lure the Indian customers, they have lined up several new models. Particularly the small car segment seems to be the biggest deal clincher for many. With almost all the companies showing record sales, two major Japanese companies Toyota and Honda too are planning to enter the small car segment soon. The competition seems to get even better in the days to come.
No doubt, India has become one of the major emerging economies in the world. But there is yet another big reason for the world car majors to hit the Indian market. In April this year, Indian automotive industry achieved yet another milestone, as it became the second fastest car markets in the world, only next to China. Buoyed by the robust performance, Society of Indian Automobile Manufacturers (SIAM) forecast 10-14 per cent growth for the industry during 2010-11.
According to the figures released by SIAM, total vehicles sales in India in the last fiscal was at 1,22,92,770 units compared to 97,24,243 units in the previous financial year. "This year was one of the best years for growth. When we started the year, we did not expect such high growth, we are pleasantly surprised," SIAM president Pawan Goenka told reporters recently. He cited variety of factors, like the stimulus package announced by the Indian government, lower interest rates, implementation of the sixth pay commission and new model launches for the record sales. The strong sales have made India surpass Germany to be the second fastest growing market after China which recorded a 42 per cent growth last year. Germany occupied third place with 23 per cent rise in sales even as many other markets in the world witnessed a negative growth.
Sales in the domestic market were driven mainly by the car and the two-wheeler segments that posted 25.10 per cent and 26 per cent increase respectively. In 2009-10, domestic passenger car sales rose by 25.10 per cent to 15,26,787 units from 12,20,475 units in the April-March period of the earlier fiscal. The country's largest bike maker Hero Honda's sales rose by 23.14 per cent at 42,93,991 units. Bajaj Auto saw its sales climbing by 39.59 per cent to 17,81,748 units in FY'10. Total two-wheeler sales in FY'10 also increased by 26 per cent at 93,71,231 units compared to 74,37,619 units in FY'09. The sale of commercial vehicles in 2008-09 increased by 38.31 per cent to 5,31,395 units from 3,84,194 units for the previous fiscal, SIAM said.
When asked about the outlook for this fiscal, Goenka said, "Overall the industry is in good shape and most of us are positive about next fiscal. We have some concerns and if no major,” he added.
The automotive companies are expecting even bigger things and gearing up for the coming festive season. Car and bike sales set to hit new records from September-October this year. “As we enter the festive season in the coming months, we anticipate further growth in our sales,” said a local car dealer.
But there are a few concerns like the inflation. With yet another good monsoon, prices are likely to come down further, if one goes by the statement of Finance Minister Pranab Mukherjee. Mukherjee, who was in Hyderabad to attend the southern chief ministers’ meeting, promised to bring down the inflation to single digit in the next few weeks. “With good rains in almost all the places in the country, the food production in the country set to touch new records. And prices will certainly come down,” he said with confidence. For the Indian automotive industry, things are looking good and the journey may get even better in the days to come.