Indian auto industry on a uphill

Commercial vehicle sales also reported an increase for the second consecutive month, growing 18.5 per cent to 40,624 units in August from 34,289 units in the year-ago period. The major pull came from light trucks which has shown strong growth with demand picking up in rural markets, FMCG and infrastructure sectors. Commercial vehicle sales were negative for almost a year before bouncing back in July this year.

As per figures released by the Society of Indian Automobile Manufacturers (SIAM), auto sales in August stood at 10.08 lakh vehicles, 24 per cent more compared to the year-ago period. This was largely due to increased demand for passenger cars that grew 26 per cent to 1.20 lakh vehicles followed by two wheelers which grew 25 per cent to 7.76 lakh units in the same month.

The country's largest car maker, Maruti Suzuki, posted a 29 per cent growth in sales at 69,691 cars and lifted the entire domestic car segment. Its export growth was much higher at 156 per cent in August over the same month last year.

"Strong demand from the domestic market and a likely bumper festive season, along with scrappage incentives coming from Europe, propelled sales for the company. The momentum is expected to continue for the second half of this year and we are looking at increasing production to match the demand," a senior Maruti executive said.

Other major car maker Hyundai Motor India grew 13 per cent to 24,401 units in August over the same period last year. Sales of domestic automakers like Tata Motors and Mahindra and Mahindra also jumped in August while American car maker General Motors and Japanese major Toyota Kirloskar Motor recorded negative sales in the same period.

Three analysts tracking the auto sector said sales would improve in the coming festival season. "Car sales have been impressive in the pre-festive period and the footfalls to the dealers are expected to increase in coming weeks from mid-September," said Vaishali Jajoo, auto analyst with Mumbai-based broking firm Angle Broking.

Besides strong car sales, demand for two-wheelers went up in August compared with flat sales in the same month last year. Of the top four two-wheeler makers, Hero Honda and Honda Motorcycle and Scooter India had posted higher sales last year even as TVS and Bajaj Auto saw lower demand. This has changed in August with all top four players reporting positive sales last month.

Chennai-based two wheeler maker TVS Motors saw sales leap 20 per cent to 1.15 lakh units in August over the same month last year and Honda Motorcycle and Scooter India posted 12 per cent increase to 90,288 units.

Bajaj Auto came out of the negative territory and posted a 4 per cent increase in sales to 1.22 lakh two wheelers in August after the company re-entered the economy segment with 100 cc engine bike, Discover, after a gap of almost three years. But Hero Honda continued to lead the show with 38 per cent increase in sales to 4.08 lakh units in the same period.