NEW DELHI, MAY 9: Unexpected growth in April revived some excitement in the automobile sector that has been battered by high interest rates and rising steel prices from the start of the year. The industry ducked the trend growing by 9.83 per cent in the month as consumers stopped deferring purchases expecting price hikes in the offing.

“Talk of rising steel prices have led to consumers pre-empting price hikes in future by doing the purchasing now. Further, consumers have now realised that high interest rates which seemed unsustainable in the past, are here to stay,” said Hyundai Motor India Ltd (HMIL) vice president (marketing and sales) Arvind Saxena.

Overall sales in the industry went up from 734,103 units last April to 806,238 units this year led largely by passenger vehicles which grew by 21.21 per cent during the month. Two wheeler sales also saw a mini-revival with a 8 per cent growth helped largely by low base effect from last year. Commercial vehicles also improved their performance over last year growing by 7.62 per cent from 30,914 units to 33,271 units.

“While passenger car segment has done well, it is not uniform across the board as small cars have grown more even on a higher base. The excise cut saw a fall in car prices and consumers are rushing to complete their purchases before prices are hiked again,” an official at the Society of Indian Automobile Manufacturers (SIAM) said. Compact car sales during the month went up by 23.29 per cent while mid size car sales grew by 21 per cent.

However, executive and premium car segment slid by 10.15 and 34.71 per cent respectively.

Despite the unprecedented relief the auto industry is not quite rejoicing and do not expect April figures to be replicated in the following months. “New model launches like Swift Dzire and i10 have brought in the demand and deserve the credit for this. The availability of retail finance still exists and interest rates continue to be high so there is not huge growth in the market currently,” said Maruti Suzuki India Ltd executive officer (marketing and sales) Mayank Pareek.