The festival season has kicked off on a strong note for India’s automakers with most showing strong double-digit growth for September over last year’s figures, on the back of a revival in consumer confidence, benign interest rates and a revival of the economy.

Strong demand helped the industry post its eighth month of growth in the first festive month, promising more in future. Auto companies and analysts are upbeat about registering double-digit growths in sales in the coming months. And the markets have responded, giving a thumbs up to listed auto companies.

A festival season is the best time for car and two-wheeler purchases, with Indian consumers preferring to purchase big-ticket items such as vehicles and homes on auspicious dates. The September sales were good, despite both Shradh and Navratra falling in the month. Demand on these two occasions generally falls.

“The economy is reviving and so too is business sentiment. The same kind of growth is expected for the next 6-8 months,” according to Vaishali Jajoo, senior research analyst, Angel Broking. She, however, added that the car-purchasing trend is usually low in December, as the models sport ‘a year ago’ tag.

India’s largest carmaker Maruti Suzuki India posted a 17.3 per cent September growth in sales at 83,306 units, compared with the same month in 2008. However, it posted a 1.7 per cent decline in month-on-month sales. In August, it had sold 84,808 units. The company had said that it expects to sell around 83-84,000 unit sales in each of festive months of September and October. On Wednesday, it had said it expects double-digit growth this year.

“It is fair to see Maruti doing such units in the first festive month. I expect the same kind of numbers from Maruti in the next 3-4 months, as this is the maximum amount of cars they can produce,” Jajoo said.

Country’s second largest carmaker Hyundai Motor India registered 16.4 per cent sales growth in September at 53,804 units, compared with last year. This is also the highest monthly sales volume achieved by the company in 11 years, since it launched its compact car Santro in October 1998.

“The sales for the month of September were promising as customers returned to the showroom,” Arvind Saxena, senior vice president – marketing & sales said in a statement. “We hope that this will be the turning point for the automotive industry and if sales remain strong during Diwali, we can look at double digit growth for the current year,” he added.

According to him, though sales were higher because of the festive season, low interest rates and an economic revivial were factors that helped push sales. The previous highest monthly sales were witnessed in March 2008, in the wake of an excise duty cut. “We expect to grow more than last year on a month-on-month basis,” Saxena said.

World’s largest two-wheeler maker Hero Honda Motors grossed 4.01 lakh unit sales in September, up 4.16 per cent from 3.85 lakh sold in the same month a year ago. The company recorded a dispatch volume of 4 lakh units for the second month in succession.

Anil Dua, senior vice-president, marketing and sales at Hero Honda Motors said, “We have been successfully able to leverage the festive season demand, to post unprecedented sales in this quarter. We expect our retail sales to surpass the six lakh units mark achieved during the festival period last year.” “Growth momentum will further accelerate in coming months,” according to Atul Gupta, vice-president, sales and marketing, Suzuki Motorcycle India. The company sold 15,719 units in September, up 24 per cent over the same month of the previous year. Yamaha Motor also posted 160 per cent growth in sales at 26,394 units on a low base last year.

The revival is not just limited to passenger cars and two wheelers. “The commercial vehicles segment is also picking up now and we expect it would continue for the remaining months in this financial yera,” vice-president sales & marketing (commercial vehicles), Tata Motors, Ravi Pisharody told FC.

General Motors India sold 7,654 units in September, thus clocking the highest sales figure for any month ever in the history of the company in India. As if that is not enough, the company is expecting to witness even better sales in October, riding on reduced interest rates on auto loans.

The company registered a 49 per cent growth in sales in September, compared with the same period last year. Last year in September it had sold 5,154 cars.

“GM India is expecting to see even better sales in October overall, especially with regard to our compact car Chevrolet Spark. The interest rates for auto loans have come down from around 14 per cent to 10 per cent now. That is of great help. There seems to be greater liquidity in the market," GMI vice-president (corporate affairs) P Balendran said.

(Inputs by Rupesh Janve, Darlington Jose Hector, D Govardhan, S Ronendra Singh)