After festive season, automakers still remain upbeat

The good times continues for the Indian auto industry. It has exactly been a month since the festive season got over but demand for new cars and bikes has not slowed down.

The recovery in the auto sales at the beginning of this fiscal was largely led by Indian firms like Hero Honda, Maruti Suzuki and Mahindra & Mahindra. But now even the big MNC players like Skoda Auto, Honda and Hyundai have joined the party as new launches, coupled with easier availability of finance, continue to attract more buyers. Most of the automakers are operating at optimum capacity, hoping that the double-digit growth rate will continue well into 2010.

Ashutosh Dixit, senior GM for sales at Skoda India, said, "We don’t see any reason why the sales momentum will slow down. Things are looking up and we are confident that new launches will further boost our sales.”
Skoda India is confident of growing by 25 per cent in 2010, with an eye on selling 20,000 units. It is banking on higher demand for its new Laura & Superb model and also the launch of its much-awaited SUV Yeti.

Another carmaker Hyundai has diverted a certain portion of its export capacity for the domestic market. Honda Siel is also seeing an increased capacity utilisation at its Noida plant after a good response to the new variants of its Civic and CRV models.

Automobile manufacturers are also getting a boost from the export front. Honda Siel's engine plant is Rajasthan is operating at full capacity and has orders booked till March. Tatasuya Natsume, director of marketing at Honda Siel, said, "We are overwhelmed by the response of the new Civic and CRV. We are operating at 70 per cent capacity at our Noida plant and we are operating at optimum capacity at our engine plant.”

Hyundai India has its orderbook full till January 2010 and is entering new markets like Australia and New Zealand. The shipments for these new markets will begin shipments next month.

Though the pick-up in sales has been much better than expectations, this sales rally could face a speed breaker if prices go up due to a hardening of raw material prices and rollback of excise duty.