Car sales in India rose an annual 20.1 per cent in March, with customers advancing purchases ahead of price hikes. Overall, car sales gained the most in six years in the last financial year, data released by the Society of Indian Car Manufacturers (SIAM) on Friday showed.
Auto firms hiked prices from 1 April due to new emission norms-related expenses and rising raw material costs.
Domestic firms sold 155,600 cars in March, compared with 129,585 units in the same month a year ago. Sales of trucks and buses, a barometer of economic activity, rose 61.2 per cent to 67,362 units in the month, SIAM said.
Vehicles sale are expected to reach a record high for the second year in a row in 2010/11, as rising incomes in a rapidly growing economy boosts demand. "If we don't get any major surprises ... we expect a growth of 10-15 percent for the industry," Pawan Goenka, president of SIAM, said.
Car sales are expected to rise on an improving economy and motorcycle makers are increasing capacities in anticipation of increased demand, especially in the popular 100cc segment. Sales could also get a boost due to companies such as General Motors, Ford and Volkswagen launching their new compact cars in the past three months.
Sales of passenger vehicles, which include cars and utility vehicles, are expected to rise to 4.5 million units by 2015/16, Goenka said, when the total value of the auto industry would be worth $145 billion (Rs6,43,800 crore). "For this we need to grow at 16-17 percent annually," he said.
Rising commodity costs, possible increase in taxes, hardening interest rates and new emissions norms pushing vehicle prices higher were the risks for the industry, Goenka said.