Auto sales rose sharply in the quarter ending September, as sales volume of high end passenger cars increased sharply during the period Sales of passenger cars is showing momentum and it seems that worst may be over for the sector, which remained sluggish in previous year due to decreasing demand on account of by high interest rate, weak economy, high taxes and escalating car prices.
Passenger car sales jumped 22 percent over the same quarter last year, while rising 24 percent over the preceding quarter. The sales of high end, 1300cc plus, cars was the major driving factor for increase in sales volume since the target market for this sub-sector is less vulnerable to price hike and less dependent on car financing. In addition, reduction in FED and car prices, helped low end car segment, which also showed signs of recovery.
However, buyers of commercial vehicles were on the sidelines, as Eid holiday season, amid lesser working hours, kept business activities low. Being at low end PSMCs market share decreased by 13 percent, while that of INDUs grew by 15 percent owing to tremendous growth in Corollas sales volume. However, compared with previous quarter, PSMCs unit sales increased by 55 percent due to price reduction in low segment cars and companys initiative to launch Suzuki Auto Finance Arrangement Program, which helped its customer to purchase cars through financing.
The two wheeler industry also performed relativity better, with sales swelling by 26 percent in the first quarter against same quarter last year as high car prices kept buyers away from auto counters. In addition, fears of hike in petrol prices and reduction in CNG supply make motorcycle a more affordable and economical choice. Going forward, Yamahas initiative to set up motorcycle manufacturing industry in three phases bodes well for industry and buyers as it will trigger market competition and decrease motorcycle prices.
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