Car sales in India rose 61% year on year in November, reinforcing signs of recovery in Asia’s third-largest economy. But sustained strong demand after the annual festival season sales peak has caught industry suppliers off guard.
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The Society of Indian Automobile Manufacturers (SIAM) said November sales rose to 133,687 last month from 83,121 a year earlier. Analysts told Reuters that better-than-expected sales had led to a shortage of cars at retail outlets with customers experiencing longer waiting periods.
After a downturn in 2008, vehicle sales picked up from early this year and annual growth has been in double digits for the past five months. The recovery has now spread to commercial vehicles, seen as a sign of improving business confidence.
Sales have been so strong, buoyed by stimulus measures, that autoparts makers have struggled to meet demand.
Sugato Sen, SIAM’s senior director said. “Many companies have suffered. The down-the-line supply chain has not been able to match the capacity required for growth.”
Last month, the head of Ford’s Indian operations, Michael Boneham, told Reuters the industry got back on track so quickly that “everyone was caught napping”.
November vehicle sales figures came a week after data showed the Indian economy grew an annual 7.9% in the last quarter, the fastest in 18 months and well above expectations.
Earlier this year SIAM forecast sales of passenger vehicles – cars, utility vehicles and multi-purpose vehicles – to rise just 3-5% in the year to March 2010, after ending the 2008/09 fiscal year flat at 1.55m units.
But, between April and November alone, carmakers sold 1.22m passenger vehicles, 20% more than a year ago, and SIAM said it would now review its annual sales targets.
Sales of trucks and buses doubled from a year earlier to 40,847 units in November, although monthly sales were below September and October levels.
