July car sales shoot up

The Indian car market is doing very well and has posted good results for the month of July. Car sales for the month of July went up 38 per cent. The Indian car industry recorded a total of 158,764 cars sold in the month of July according to data from the Society of Indian Automobile Manufacturers (SIAM). Positive customer sentiment and strong hopes of food prices coming down kept the momentum going.

However, the carmakers still have a few things to worry about like capacity constraints, a possible rise in interest rates and supply bottlenecks due to the starting of the festive season. To meet the immense demand of the country’s festive season the carmakers would have to take some serious steps.

Despite the hurdles, the momentum seems to be good and there are all the possibilities of the demand for newer cars going up. According to SIAM the industry is expected to grow at 12 to 13 per cent in the year ending March 2011.

t this rate of growth, India would be in the top car markets of the world. Even at the moment the country’s car market is among the world’s biggest and the fastest growing. SIAM data shows that the country's automobile sector growth is pegged at an average 35 per cent in the first four months this year.

However, the companies need to ramp up their production capacities and a little worrisome factor is that the country’s two largest carmakers Maruti and Hyundai cannot do so at a large scale. It is not just these two but cars makers like Ford, Volkswagen, Fiat and even Mahindrra and Mahindra are not running full capacity.

Also, what car makers need to plan for are the rising interest rates. Many car buying budgets would be affected due to the rising rates and due to rising input costs it would be difficult for carmakers to give very heavy discounts.

For any carmaker in the country, the period between September to November is a very crucial one as this is the main festive season of the country. This time of the year sees the most amount of demand for new cars and buyers are on a spending spree across segments. This is also the time around which weddings and other auspicious things take place. Thus, making full use of the opportunity and luring the most amount of customers would be ideal way to go about it.

According to experts cars like Tata Motors' Nano which started production from its dedicated plant in Gujarat, would be benefiting a great deal this festive season and carmakers expect good numbers.