Auto Sales Experience 19 per cent Growth in January 2011

The non-stop increase in fuel prices and car prices have become an old story, but is the Indian junta tired of these price hikes already? If we had to take a guess, we would say no. Surprising, but it is true. In January 2011, automobile sales in India grew 19% backed by economic growth, rising incomes and introduction of new cars. According group Society of Indian Automobile Manufacturers, the total vehicle sales count reached a whopping 1.32 million units, including trucks and other vehicles, in January as compared to the 1.11 million units sold in the same period a year ago.

Several car makers such as Toyota Motor, the world’s biggest, and Nissan Motors are introducing new models and expanding their production in India’s fast growing automobile market. Industry analysts say that the rate of growth may become difficult to maintain as rising interest rates, higher fuel price and increasing costs of raw materials raise the cost of ownership. The growth rate, which was at 31% last year, may come down to 15% this year.

“We have already seen an increase in fuel and interest rates on a constant basis. If excise duty goes up, the growth may come down to 10-11%,” said Mayank Pareek, managing executive officer (marketing and sales) at Maruti Suzuki India Ltd. “Commodity prices are also on the rise. So, these put together will make things difficult for the auto makers.”

The unusual increase in January sales may be the first indication of an upcoming moderation in the industry after the spectacular performance of last year. Compact cars introduced last year include the Figo from Ford Motors, the Micra from Nissan and the Beat from General Motors. Toyota started selling its Etios sedan in December. In the past one month, fuel prices have increased by at least Rs.5.50. And India’s central bank has increased interest rates almost seven times in the past 13 months.

“What we are seeing now is moderation,” said Sugato Sen, a senior director at Siam. “Sustaining 30% growth wasn’t feasible.”

Indian Government to Introduce Concessions to popularize hybrid Cars in India

Petrol and diesel prices in India are increasing by every passing second. One can say that hybrid cars could be the answer, but Indians are yet to warm up to the idea of buying one mainly because of the limited choices and high prices of these cars in the Indian market. And just when we thought the Indian government was not doing anything to popularize the hybrid concept in India, here comes a shocker.

To protect the environment as well as reduce our dependency on fossil fuel, the government is working on a policy to encourage manufacturing of hybrid cars in India through excise duty concessions. A government official has revealed that the proposal will be piloted by Heavy Industries and Public Enterprises Minister Praful Patel. Along with fiscal sops like differential excise on the cars, this policy would also focus on incentivizing research and development for development of the hybrid vehicle, he said.

“To encourage the production of these cars (hybrids), there is a need to upgrade the laboratory knowledge,” he said.

The Department of Heavy Industry has sought the Cabinet’s approval to form a high-level panel on the issue. And once the panel is approved, it is expected to come out with a clear-cut policy by September.

Hybrid cars run on both the conventional fuel as also electricity charged battery. Currently these vehicles are imported in India, thus incurring heavy taxes. The costs of these cars are almost 25 per cent more than the regular petrol or diesel fuelled vehicles. Toyota’s globally popular hybrid vehicle, Prius, is being imported in India and is priced at over Rs 25 lakh. Almost three years back, Honda had launched it Civic Hybrid Priced at Rs 21.5 lakh, which was slashed to Rs 13.36 lakh but has since stopped selling the car due to cost ineffectiveness.

“We have to see as to how to reduce the price to a reasonable level,” the official said.

Another aspect of the research is a study that will be conducted to assess the infrastructure availability and sops needed for the promotion of these cars in the domestic market. Conventional cars that run on petrol or diesel attract excise duty ranging from 10 per cent (for small vehicles) to 22 per cent for sedans. The hybrid technology is pioneered by Japan, the US and Europe.

Success of Indian Car Industry

The Indian car market has worked hard and today it has reached a position where it is now. The Indian car industry emerged with the launch of first car in1898. Slowly the car business of Indian started growing and has come a very long way winning many recognition and appreciation.

There are several factors that have supported in the growth of the Indian car industry. Government played a very vital role in the Indian car market. The flexibility of the policy attracted many foreign investors to be a party of automobile industry. Reduced duty rates on small cars also benefitted.

The economic factors are the second primary reason for the car industrial growth. GDP (Gross Domestic Product), per capita income and high ownership capacity are some of the reasons that encouraged several foreign car manufacturers to enter India.

The Indian car market has proved its worth by receiving global attention and appreciation. Media too played a very good role by breaking down the geographical limitations. This helped the car companies to create awareness in every corner of the world.

It is not just the recognition but also the fact that foreign car manufacturers realized the importance of Indian market and also potential market for their models. It is not just the launch of new cars but many car manufacturers are also setting up production plants in India. The Indian car industry is crowded with all varieties of car models like the small cars, mid-size cars, luxury cars, super luxury cars, and sports utility vehicles.

Hindustan Motors, Hyundai Motors India Ltd., Reva Electric Car Co., Honda Siel Cars India Ltd Fiat India Private Ltd., Daimler Chrysler India Private Ltd, Ford India Ltd., General Motors India, Skoda Auto India Private Ltd., and Toyota Kirloskar Motor Ltd are some of the car brand that shines on the Indian roads. Compared to earlier, the luxury car markets also gained importance in India. Some of the major super luxury car players like Aston Martin, Ferrari, and Rolls-Royce, have long since made a foray into the Indian car market.

The Future of Car Niche Inside In Asia

In the latest many years, India started becoming a key hub as far as automobiles had been concerned. Much more and a lot more automobile makers have begun seeing the possible of your Indian car market.

Final 12 months, our country became the fourth largest exporter of automobiles in Asia. We stood just behind Japan, South Korea and Thailand. In 2008, India was the ninth greatest vehicle market producing over 2.three million units. This yr, with a lot of automobile launches already, we see our nation growing like by no means before. Let's possess an appear at the existing Indian automobile market.

In February this 12 months, several vehicle makers saw record product sales figures and vehicle gross sales have cruised up further in March. Union Spending budget 2010 brought the partial rollback in excise duty reduction on cars. A little later, came the hike in car prices. In spite of that, March showed great numbers when it came to car product sales.

Just before the Union Spending budget, the Indian vehicle market was sizzling. Consumers feared the hikes publish budget and bought vehicles within the month of February itself. So, February sales shot as much as 34 per cent with one,94,548 items offered as when compared with one,45,166 models in February 2009.

Previous we had the financial downfall, while this 12 months has been showing signs of recovery. Passenger vehicle sales figures from the key car makers in 2009-10 shot up by 26.7 per cent, to 2,429,419 units, as in comparison with one,918,146 units in 2008-09. Again, with boost in steel prices, the manufacturing price of cars is probably to increase. The BS IV norms too would come into picture. Therefore, submit April 1, automobile costs are going to increase. This said, purchasers flocked to showrooms to obtain their share just before the costs really shot up.

Although Toyota has raised the prices of Corolla, Innova and Fortuner models by Rs 5,000 to Rs 14,000, Maruti Suzuki has increased rates for its A-star, Ritz, Estilo, Omni, Swift, DZire and SX4 models in between Rs 1000 and Rs 7000.

Specialists still think that the overall progress is going to continue in future, may possibly be at a fairly lower rate. Tier-II and -III towns may possibly see a 15 % development inside the car industry in 2010-11, in spite of fears of boost in interest rates and high inflation. GM alone is believed to have a 50 percent development around last 12 months.

Sales for Maruti have gone up by 7.7 per cent in March, at 79,530 models. Last 12 months, it had offered only 73,855 models in March. Not just that, Maruti Suzuki

has grow to be the only Indian automobile maker to accomplish the milestone of a million units becoming bought in a 12 months. Export figures as well improved for Maruti. Against 70,023 models in 2008-09, Maruti sold 147,575 items in the course of 2009-10.

Coming to Hyundai, it noticed a 27.three per cent growth in March 2010 with 31,501 models sold, compared to the 24,754 units sold in March 2009. This is the highest recorded domestic gross sales figure in Hyundai's history. With Indigo Manza and Sumo Grande MKII selling well, Tata Motors saw a 17.4 per cent development, at 27,761 units compared to 23,649 models sold in March previous 12 months.

India is becoming 1 from the world's biggest markets of small automobiles. Because of India's strong engineering base and production expertise in creating fuel-economic, cost-effective vehicles, several car businesses like Nissan, Hyundai, VW, Toyota and Maruti Suzuki have expanded their production facilities. By 2011, Nissan is expected to export 250,000 vehicles created inside the Indian automobile market place. By 2011, GM too may possibly export around 50,000 cars made here, in its Indian plant.

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