Lower loan rates & new launches to boost auto sales

The last month of fiscal 2012 saw car sales report a smart bounce back after flat growth in the previous 11 months. Led by Tata Motors and Mahindra & Mahindra, total car sales in March jumped over 10% during the month. The two-wheeler sales story was however a mixed bag, reports CNBC-TV18's Ronojoy Banerjee.

After 11 months of flat growth, automakers saw a late surge in March sales - helping the sector post perhaps a 10% growth in the month. Once the official numbers are out, the overall picture may reveal that FY12 may not have been that bad a year as anticipated. The surge may have partly been on account of wary customers rushing to buy cars to beat the excise hike that kicked in from midnight of March 16.
The data shows that market leader Maruti Suzuki continued to perform below expectations, reporting only 2% growth this March. Its flagship diesel sedan SX4 saw a 60% dip in sales due to issues with engine supplies.
Hyundai Motor India saw a 20% rise in sales to 39,122 units largely driven by its frugal diesel sedan - the Verna.
The big surprise was however Tata Motors and M&M. With Nano sales at over 10,000 units, Tata Motors reported an over 30% growth in the passenger vehicle segment. The Cheetah inspired XUV 500 drove M&M sales to a new monthly high. Hero MotoCorp saw March sales grow only 2.5% - an indication that the two-wheeler giant will have to focus on new markets overseas to see rapid growth.
Honda Motorcycles & Scooters India continued its growth momentum into March fortifying its position in the world's second largest two-wheeler market. TVS Motor disappointed with flat sales in the domestic market.
Despite a better showing this March, car makers remain concerned over sales prospects in the coming months. Perhaps lower car loan rates and a slew of new launches may restore the mojo in motown.