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Indian Car Sales Rose in April’09 on Government Stimulus
May 29, 2009

Indian car manufacturers’ sales significantly swelled in April 2009, primarily due to the government stimulus aid given in the end of 2008 and beginning of 2009.

With all major car manufacturers (except Renault – an arm of Mahindra & Mahindra) registering a positive growth in sales in April 2009 as compared to the same month previous year (2008), the Indian automobile industry seems to have embarked on the path of recovery in fiscal 2009-10, as reported by  domain-b.

In April 2009, Maruti Suzuki sales crossed the mark of 70,000 Units for the fourth month in succession, with the YOY growth of 15% to reach 71,748 Units. Hyundai, the second largest car manufacturer in India, also registered growth of 11% to take its sales figure upto 44,371 Units. Mahindra & Mahindra, the utility vehicle manufacturer, posted a growth of 36% by selling a total of 18,447 Units. Logan, jointly manufactured by Renault and Mahindra & Mahindra, recorded 69% decline to reach 550 Units, while the sales of Honda Siel Cars India, a premium car manufacturer, surged to 3,656 Units by growing 7% in April 2009. 

The Indian government announced stimulus packages in December 2008 and January 2009 to bring the industry back on track. Consequently, Hyundai Motor, Yamaha Motor, Honda Siel Cars and TVS recorded robust sales growth in April 2009. 

India’s car industry has remained resilient amid recession and has headed into the new fiscal year with positive sales. The industry experienced modest growth in April 2009 as compared to last year (2008). However, industry experts believe that the market is still far behind to rise to the levels of double digit growth. 

Auto sales in the country shrunk in the last three months of 2008 (October-December) due to slowdown in the domestic economy triggered by global financial crisis and banks precautionary steps to avoid bad loans. Commercial vehicles, especially buses and trucks, that represent financing for two out of every three units sold, were badly hit by the recession as sales in some months declining to nearly 50%.

According to a Research Analyst at RNCOS, “The Indian automobile industry is expected to slowly recover from the recession in fiscal 2009-10. The uptrend in sales highlights the successful business model of the industry. The sector will see unit volume growth in spite of tough and challenging environment, and the rising sales will continue the growth trajectory in coming months.”

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