Maruti Suzuki, posted a third straight month of higher sales in March helped by a jump in exports of its compact A-Star and strong rural demand.
But analysts said it was too early to confirm a turnaround for the automobile sector that has been struggling in the wake of the global financial crisis and a slowing domestic economy.
Maruti, 54.2 percent-owned by Japan’s Suzuki Motor Corp, said on Thursday total sales in March rose 22 percent from a year earlier to 85,669 units, with exports more than doubling to 11,814.
Sales had jumped nearly a quarter in February and rose 5.4 percent in January from a year earlier after the government slashed factory taxes and the central bank cut interest rates to revive consumer spending.
This helped lift Maruti’s sales by 3.6 percent for the financial year ended March to 792,167 units.
Exports in 2008/09 rose 32 percent, the company said, led by 19,000 units of A-Star launched last November.
“We will have to wait for a few more months of sales for a trend to emerge,” said Hitesh Kuvelkar, associate director of research at First Global Securities.
“Crude prices are relatively down and interest rates have come down, but I don’t see much enthusiasm among banks to lend to the auto sector,” he said.
Leading utility vehicle maker Mahindra and Mahindra said on Wednesday its March domestic sales jumped 31 percent from February, but grew only 11 percent from a year earlier.
Pawan Goenka, head of automotive division at the company, told a television channel he expected general elections that begin in mid-April to boost demand for utility vehicles for campaigning, but May and June would be testing times.
“Maruti and Mahindra sales have gone up because of their new launches,” said Chetan Vora, auto analyst with Brics Securities.
“I don’t expect to see this kind of growth, going forward,” he said. “Revival will not come so fast, as manufacturing is not picking up.”
A survey showed Indian manufacturing activity contracted for a fifth straight month in March as demand remained depressed by the global economic downturn.
South Korean Hyundai Motor Co’s Indian unit reported an almost 16 percent fall in March domestic sales, though it rose nearly 17 percent from February.
“The industry is far from seeing a turnaround at this moment,” Arvind Saxena, senior vice president for marketing and sales at Hyundai Motor India, said.
The country’s leading vehicles maker, Tata Motors, said government fiscal stimulus packages were helping but it would take time to reach year-earlier levels.
Its March sales fell 13 percent from a year earlier, but rose 24 percent from February.
Bike makers also followed similar patterns. Hero Honda Motors, in which Japan’s Honda Motor Corp has a 26 percent stake, said March sales grew more than 10 percent from year ago and helped boost 2008/09 sales 12 percent.
Smaller rival Bajaj Auto, however, said March sales fall 13 percent on year but rose marginally from February.
The BSE Auto Index climbed 25 percent in the March quarter, beating the main index’s 0.6 percent gain.