Indian automobile sector ended up the year 2009 with high optimism as the industry sales showed a robust growth during the last month of the calendar year 2009.
According to a recent announcement made by the Society of Indian Automobile Manufacturers (SIAM) the automobile sales in India for the month of December 2009 stood at 1,000,500 units, showing an increase of 67.5% against the low base of 597,622 units in December 2008.
The growth is believed to be the highest so far in 2009–10, followed by the growth of 46% recorded in November 2009.
“A combination of factors like the three fiscal stimulus packages, low interest rates on vehicle financing made possible by PSU banks, cash infusion from the sixth pay commission and new models from manufacturers have helped December sales to rise,” says Pawan Goenka, President of the Society of Indian Automobile Manufacturers and President of Mahindra & Mahindra, at the ongoing Auto Expo 2010.
The rise in automobile sales would create repercussions on the metals industry, as the industry had faced one of the worst phases in the late 2008 and early 2009. Credits drying up and order deferments had put the metal companies in a fix. However, the times changed with government fiscal stimulus packages taking off well and industry once again started pounding.
On the stock exchanges, auto stocks posted heavy returns. On the Bombay Stock Exchange (BSE), the sectoral index, BSE Auto index gained significantly during the calendar year 2009. Since the start of the year, BSE Auto index surged from 2448.40 points to 7435.83 points through the year.
Leaders in auto sector, Tata Motors Ltd (BOM: 500570) gained 409.38% during the year 2009 on the BSE, Bajaj Auto Ltd (BOM: 532977) yielded 369.41% returns from 1st January 2009 to 31st December 2009. Mahindra & Mahindra Ltd (BOM: 500520) and Maruti Suzuki India Ltd (BOM: 532500) posted returns worth 307.08% and 205.36% respectively during the said period.
The 68 per cent rise in December 2009 sales was made possible by the sustained growth in cars and utility vehicles (50 per cent), continued growth in medium & heavy commercial vehicles on a low base last year (248 per cent), and in two-wheeler sales (67 per cent) last month.
Sales of large commercial vehicles, termed medium and large trucks and buses, rose for the fifth consecutive month. The December rise was an impressive 248 per cent, in which the industry sold a record 24,037 units. This is the highest growth posted by the CV industry for this year. The fourth quarter of 2009 was a low base in sales of large Cvs, when it dipped between 50 and 70 per cent. Industry executives say the high growth will continue even in the first quarter of 2010, on the back of buying before the new emission norms get effective in April. Total sales of CVs, (including light CVs) was 48,614 units.
Sales of three-wheelers, on the back of good demand for passenger carriers, grew by 83.7 per cent, at 34,993 units. Two-wheeler sales for December, led by Hero Honda and a resurgent Bajaj Auto, rose by 67 per cent, enabling manufacturers to sell 767,796 units.
Sales of passenger vehicles in December grew by 50 per cent, with the industry selling 149,097 units. November sales growth was the highest, at 67 per cent.
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