Positive business sentiment, soft interest rates and new models revved up car sales in the country in July. But despite high sales the growing concern for the Indian automakers has been the rising inputs costs that has kept their margins under pressure. "The auto maker’s top line has grown at a decent pace but there has been impact on margins. Auto stocks are under pressure because of higher input costs,” said Sanjay Vaid, president-institutional equity at Systematix Shares. During the month, India's biggest car company, Maruti Suzuki, registered 33 per cent jump in sales in the domestic market to 90,114 units, against 67,528 units in the same month last year. "With the growing economy, lots of jobs are being created and this has boosted the confidence to spend more on cars," Ernst & Young Partner and National Leader (Auto Practice) Rakesh Batra said. The country's second largest car-maker, Hyundai Motor India, also reported a 24.2 per cent jump in domestic sales to 28,811 units in July, 2010, from 23,193 units in July, 2009. Tata Motors too posted a growth of 52 per cent for passenger cars driven primarily by increased Nano dispatches as well as the Indigo Manza. Tata also saw a 26 per cent jump in its commercial vehicle sales. Another leading manufacturer, Mahindra & Mahindra, saw sales jump by 19.79 per cent to 26,303 units last month from 21,957 units in the same month last year. Batra said the growth momentum is expected to continue in future up to the festive season. "I expect the good sales to continue during rest of the monsoon. This time, the festive season is likely to see better sales than last year," he added. On the two wheelers front new launches drove Bajaj Auto's and TVS Motor's sales by 66 per cent and 35 per cent respectively while Hero Honda sales increased 17 per cent with over 425,000 two wheelers sold. "The motorcycle sales are up by almost two thirds. The three wheeler sales are up by similar margins. Exports have grown and hence overall sales are up by about two third," said Rajiv Bajaj, MD of Bajaj Auto. The double digit growth in the auto sector is likely to continue till the end of 2010 despite the high base effect that will soon begin to set in. However, margins would remain under pressure as commodity prices remain firm. (With PTI inputs) Read more at: http://profit.ndtv.com/news/show/indian-auto-makers-post-good-sales-growth-in-july-86628?cp

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