March quarter, fiscal numbers may match last year's at best

February brought cheer for most car and two-wheeler makers with double digit sales growth. But analysts sounded a word of caution — despite February bounty, cumulative numbers for the March quarter as well as for the fiscal may manage to settle at last year levels at best. In some cases, there could be significant declines, too.

They point out that last February, apprehensions about impending Budget announcements had led people to postpone vehicle purchase but since the full Budget wasn't present in February 2009, there was a corresponding jump in offtake.

The rally in February is being attributed to several factors including the effects of the two stimulus packages announced since December and aggressive policies adopted by public sector banks to woo car and two-wheeler buyers.

No wonder then that car market leader Maruti Suzuki reported highest ever February sales at 79,190 units (63,822 units), a growth of 24.08%. Though a large part of this growth was because of robust exports, it is still good news compared with Maruti's performance in the preceding months.

In the December quarter, Maruti had seen a decline all through: 7.1% in October, 27.4% in November and 10% in December. In January, sales did reverse declines to log 5.39% increase. Last month, domestic sales were 70,625 units (59,311 units), a 19.07% growth. Exports were at 8,565 units (4,511 units), a jump of 89.9%.

Hyundai Motor India reported 32% sales growth last month to 38,254 units (29,001 units). Arvind Saxena, senior vice president (marketing and sales), said despite the robust February numbers, the company expects "fairly flat sales growth curve for the industry for the first quarter ending March". The company reported 43.5% domestic sales growth while exports were up by 18.3%.

Tata Motors reported almost flat passenger vehicle domestic sales growth in February, higher by only 1.5% compared with the same month last year.

Though the company has reported improved sales last month compared with previous 3-4 months, the improvement is pretty marginal. Sales in the domestic market last month were 19,039 units.

Honda Siel Cars India sold 5,579 units (3,774 units), a growth of almost 48%. This growth was fuelled by flagship model Honda City, which sold 4,739 units last month. General Motors, however, bucked the growth trend by selling just 4,921 units (5,563 units) in February, a decline of 11.5% and the company cited overall market slowdown to explain this performance. Mahindra Renault also followed in GM's footsteps, reporting a decline of over 63% in Logan sales to 1,008 units (2,751 units) in the domestic market.

Sindhu Bhattacharya/ DNA-Daily News & Analysis Source: 3D Syndication