Coming out strongly from the recession, the auto industry posted its highest-ever monthly sales in January with over 11-lakh units. “The total sales in domestic market stood at 11.14 lakh units, against 7.69 lakh units in the year-ago period, a jump of 44.94 per cent,” Society of Indian Automobile Manufacturers (SIAM) said in its latest report.
“Economic growth, reduced interest rates, better money supply and reduced commodity prices have helped the industry in posting such growth,” SIAM Director General Dilip Chenoy told journalists here. He, however, pointed out that the high growth in January was also contributed by last year’s low base. The earlier highest monthly sales was 10.17 lakh units reported in October 2006.
Reporting consistent growth during the last ten months, the domestic passenger car segment posted the highest ever sales at 1.45-lakh units, up by 32.28 per cent.
All major car-makers, including Maruti Suzuki, Hyundai Motor, General Motors and Mahindra & Mahindra, reported their best sales figures.
Similarly, the motorcycle segment reported over 43 per cent growth in January at over 6.50-lakh units, while commercial vehicles sales also doubled to 53,447 units.
Mr. Chenoy, however, pointed out that the sales figures could have been even better had the suppliers of key components, particularly tyres, successfully met the demands of auto manufacturers. “Tyre shortage is an issue. Passenger car production was held up because of unavailability of radial tyres,” he added.
Mr. Chenoy, however, said exports of components had dropped and that helped the industry cater to the domestic demand up to certain extent.
Acknowledging the problems, a Tata Motors spokesperson said, “Yes, there was a supply constrain from tyres in January ... the growth could have been more.”
When contacted, Automotive Component Manufacturers Association of India (ACMA) Executive Director Vishnu Mathur said “nobody anticipated such huge growth as till six months ago sales were dwindling. This is a short-term demand-supply issue and soon the demand fluctuations will settle down.”
Major manufacturers like Maruti Suzuki India, Tata Motors, General Motors and Hero Honda had earlier faced supply constraints, which eventually affected their production.
General Motors Vice President P. Balendran said production of its multi-utility vehicle Tavera was affected last month due to unavailability of some engine parts.
“On the tyre front, we were facing problems 2-3 months ago as they (tyre makers) were not expecting such turnaround. Now they have ramped up and the situation is better,” he said.
Maruti Suzuki Executive Officer (Marketing and Sales) Mayank Pareek also said the company’s production was affected due to limited tyre supply, but “it has been solved now.”
An email query to Apollo Tyres remained unanswered, while officials of JK Tyre could not be reached.