India's car sales surged 31% in 2010 as rising disposable incomes, new models and a robust economy drove more customers to showrooms to buy vehicles from Maruti Suzuki India Ltd. Hyundai Motor Co., Tata Motors Ltd. and other auto makers.
Sales climbed to 1.87 million cars from 1.43 million in 2009, the Society of Indian Automobile Manufacturers said Tuesday.
Total local vehicle sales in 2010 also rose 31% to 14.82 million from 11.32 million.
The industry body, however, expects vehicle sales growth in 2011 to moderate due to increasing lending rates and higher commodity prices, SIAM President Pawan Goenka said in Mumbai.
"Growth will not be as high as 30% that we saw last year. If we see a growth rate of 15%-18%, we should be happy," he said.
Still, India remains one of the fastest-growing automobile markets in the world as an expanding economy boosts disposable incomes among its estimated 350 million middle class population. Car sales are estimated to jump to 3.0 million units a year by 2016, according to SIAM.
The prospects of a promising future and stagnation in Europe and the U.S. has led auto giants such as Toyota Motor Corp., Volkswagen AG and Nissan Motor Co. to expand their presence in the South Asian country.
Sales also benefited from low interest rates as well as several model launches, mostly in the small-car segment, from Ford Motor Co., General Motors Co., Maruti, Toyota, and Tata Motors, among others.
"Despite this robust performance, vehicle penetration remains among the lowest in the world at only 14 vehicles per 1,000 people--nearly half the level prevailing in all of Africa," Carlos Gomes, an analyst at Scotiabank, said in a recent report.
He said global auto makers are flocking to India as half of the country's 1.2 billion population is less than 25 years old. The figure represents 610 million potential future car buyers, which is twice the size of the entire U.S. population and nearly two-thirds of the current global vehicle fleet of 965 million cars and trucks.
In December, local car sales climbed 29% to 148,681 autos from 115,337 a year earlier. Sales rose even though auto makers halted production at their factories for a week for annual maintenance.
Maruti Suzuki, a unit of Suzuki Motor Corp. and India's largest car maker by sales, sold 75,652 cars locally, up 21% from December 2009. It produces eight small car models, including the Swift, A-Star and Alto.
Hyundai Motor India Ltd., the second-largest car maker by sales, sold 26,006 cars in December, up 17% from a year earlier. December car sales at Tata Motors jumped 31% to 16,941 vehicles.
Mr. Goenka said SIAM expects input costs for the industry to rise 7%-10% this year. "If there is this kind of a price increase, I expect companies to raise vehicle prices by at least 3%-5%," he added.
Local sales of motorcycles in 2010 rose 27% to 8.66 million while those of scooters jumped 51% to 1.96 million. Truck and bus sales grew 45% to 652,692 vehicles.
In December, sales in the motorcycle segment increased 27% to 753,358 units, with market leader Hero Honda Motors Ltd. recording a 29% growth to 452,701 units. Second-ranked Bajaj Auto Ltd. posted a 13% increase to 165,470 motorcycles, while sales at TVS Motor Co. rose 31% to 44,598 motorcycles.
The scooters segment posted a 48% increase to 188,391 units in December. The gain was helped by higher sales of Honda Motorcycle and Scooters India, TVS Motor, Suzuki Motor and Mahindra Two-Wheelers Ltd.
Local sales of trucks and buses grew 27% in December to 61,880 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 27% to 37,100 units while those at Ashok Leyland rose 16% to 6,411 units.
Source: Wall Street Journal
