Expensive fuel & auto loans: Car sales fail to rev up, 2-wheeler steals the show

NEW DELHI: October brought a glimmer of good news for India\'s beleaguered auto sector, with cars sales showing improvement and two-wheeler makers reporting some of the most robust numbers in recent months.



Top carmaker Maruti SuzukiBSE 0.13 % recorded a modest growth of 60 units in domestic sales by selling 96,062 cars in October, but its exports surged 27% from the year-ago month to 9,025 units.



The company\'s domestic market share rose to a three-year high of 40.7% on the back of consistent performance. Sales of DZire, Maruti\'s popular compact sedan, rose 20% to 17,211 units, helping offset the 7% year-on-year decline in sales of the company\'s smaller models M800, Alto, A-Star and WagonR to 39,379 units. Maruti\'s compact car portfolio, which comprises Swift, Estilo and Ritz, saw sales drop 1% to 22,188 units.



Hyundai Motor India, Maruti\'s closest rival, sold 224 more cars in the festive month compared with the 36,002 units a year ago on the back of strong demand for its newly launched i10 Grand hatchback.



\"In this challenging market environment, sales have increased over last month by 17% on account of monsoons, festival buying and strong sales of 11,519 units of new model Grand, which received an overwhelming response making it to the top five volume sellers within two months of its launch,\" said Hyundai\'s senior vice-president (marketing & sales), Rakesh Srivastava.



Domestic carmakers have had a bumpy ride so far this fiscal, with rising cost of fuel and auto loans keeping potential buyers away despite discounts touching three-year highs. In the first half of 2013-14, sales of passenger vehicles declined 5.15% to 1.2 million units.



While some revival is expected in the ongoing festive season on the back of buoyant demand from rural areas, where sales increase in anticipation of a good harvest, the Society of Indian Automobile Manufacturers expects the industry to record an overall drop in sales for the full year.



For utility vehicle maker Mahindra & Mahindra, which is third in the pecking order, October sales dropped 15% from last year to 22,924 units. M&M was affected by the higher 3% additional duty levied on sports utility vehicles in the budget.
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