R K Global, a research firm, has published its report on the monthly sales of automobiles in December 2011. As per the firm, the demand for automobiles in the two-wheeler segment remained constant. In the LCV (Light Commercial Vehicle) and M&HCV (Medium & Heavy Commercial Vehicle) segments, the demand showed a slight growth. However, the report states that in the coming months the domestic economy is most likely to stay sluggish due to the surrounding problems such as devaluation of rupee and increasing fuel prices.
The monthly sales increased in December due to rise in sales of passenger cars that were led by the leading auto maker Maruti Suzuki. Other reasons included reduction of food costs, discounts given by dealers and OEMs (Original Equipment Manufacturers) and the anticipation of lesser interest rates by RBI (Reserve Bank of India). The total sales of December 2011 rose by 3 per cent in comparison to December 2010, however, decreased by 5 per cent from November 2011. In the April to December 2011 period the total sales increased by 13.6 per cent on a year-over-year basis. Manufacturers such as Tata Motors and Hero MotoCorp registered a favourable rise. The month of December, in terms of volumes, registered an increase from November. The total number of units produced (all categories) amounted to 1.6 million vehicles in December 2011.
The automobile industry expansion will most likely depend on the Commercial vehicles. Number of units sold in the Commercial Vehicle segment accounted for 17.4 per cent to 85,000 units in December 2011 an increase from 70,000 units of December, 2010. The Personal Vehicles segment in December 2011 recorded a rise of 12.8 percent in the same month last year, while the month-on-month decreased by 4.1 per cent.
The growth in volume of the automobile sector shows a mixed outcome with reference to index performance basis, the BSE (Bombay Stock Exchange) Auto index did not fare well in December 2011 showing a decrease of 3.4 per cent, month-on-month basis.
Low sales were registered by the two-wheeler segment in December 2011 that stood at 1.4 million units, registering a decrease by 11 per cent from the same period last year. The two-wheeler industry witnessed very low sales after performing exceptionally well three times in a row till November 2011. In December 2011, the growth lessened by 5.6 per cent from the previous month. However, it is predicted that the two-wheeler industry will register a volume CAGR (Compounded Annual Growth Rate) of 9 to 11 per cent in the 2011-12 financial year. The reason for the increase can be attributed to factors like new launches, entry of new brands and the widening distribution network. Nonetheless, inflation of commodities, rising fuel prices and interest rates might hinder with the industry’s growth.
