Automobile Companies Register Robust Passenger Vehicle Sales in April

Auto companies welcomed the financial year 2017-2018 with a bang, posting double-digit growth in sales of passenger vehicles across the sector in the month of April. Industry officials cited better inventory management as the prime reason for such a remarkable sales volume growth. Further experts are of the view that such high sales figure attained last month are unlikely to sustain in May.

Auto major Maruti Suzuki registered its highest ever sales of 144,492 units in April 2017, which is a significant 23.4% increase over the corresponding period last year. In the mini vehicle segment also that includes Alto and WagonR, Maruti posted double-digit growth of 21.9% owing to improved inventory management. It should be noted that the segment otherwise yielded losses for the company in the past fiscal with substantial decline in sales volume.

Today the auto major, Maruti Suzuki reached a landmark wherein it crossed a market capitalization of Rs. 2 trillion. With the stock of Maruti trading at a record high of Rs. 6674 on the BSE today, brokerages are positive on Maruti. UBS in the one of business dailies is quoted making a statement "We remain positive on Maruti, as we expect strong volume growth in FY18-19 driven by implementation of the 7th Pay Commission and a strong model cycle. We expect valuation multiples to remain at the present level, as Maruti has demonstrated its ability to keep up with the premiumization of car demand and has increased its market share in higher-priced segments".

The domestic sales volume of Hyundai Motors for the month of April stood at 44,758 units, which is an increase of 5.7% in comparison to the same period last year. With no new launches as well as high base effect, the company is reeling under the pressure of lower sales.

Maruti Suzuki and Hyundai Motors together account for 65% of the overall passenger vehicle market. Other companies in the sector including Tata Motors and Honda Cars also recorded double digit growth in sales of 23% and 38% respectively.

Auto companies have done away with the past practice of dispatching more number of vehicles to dealers in the month of March to account for higher sales in a given financial year. This step holds relevance in the current scenario and has boosted sales across the board.

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