Volume Growth Counters Drought
One of the sectors that was supposed to witness a slowdown due...
New Delhi: Driven by record sales in passenger car and two-wheeler segments, the Indian automobile industry posted its best ever monthly sales of 12,37,461 units in July, beating the previous high achieved in March 2010, reports PTI.
According to the figures released by the Society of Indian Automobile Manufacturers (SIAM) today, automobile sales grew by 31.5% to 12,37,461 units in July compared to 9,41,070 units in the same month last year.
"The growth in the automobile industry during July was mainly due to good growth in the passenger car segment, scooters and mopeds as new model launches, penetration into rural markets and availability of finances continue to boost sales," SIAM director general Vishnu Mathur told reporters here.
He said the previous best ever sales were achieved in March this year with 12,26,944 units.
Passenger car sales in July were also the best ever attained in a month at 1,58,764 units, beating the previous high of 1,55,600 units in March. Sales jumped by 37.95% over 1,15,084 units in July 2009.
Passenger car leader Maruti Suzuki's domestic sales grew by 26.83% to 76,111 units in July, while rival Hyundai Motor India also registered 24.22% growth at 28,811 units. Tata Motors' sales jumped by 69.31% to 24,613 units during the month under review.
Mr Mathur also said the total two-wheeler sales achieved in July at 9,38,514 units were the all-time high, surpassing the previous record of 9,36,555 in May. Sales of two-wheelers were up 30.41% over 7,19,656 units in July 2009.
"Availability of finance and hardening of interest rates will be challenges, which we are seeing on the horizon now, in the months to come," he said.
Motorcycle sales in India during July also went up by 30.09% to 7,10,621 units compared to 5,46,233 units in the year-ago period.
The country's largest motorcycle maker Hero Honda posted a growth rate of 13.96% in sales at 3,89,795 units in July 2010. Rival Bajaj Auto saw sales soaring by 76.01% to 1,92,138 units.
While Chennai-based TVS Motor Company posted a 37.51% growth at 43,888 units in July, Honda Motorcycle & Scooter India (HMSI) saw its bike sales jumping by 43.30% to 55,540 units.
In the scooter segment, sales jumped by 35.65% to 1,67,195 units against 1,23,259 units in the year-ago period, SIAM said.
HMSI's scooter sales were up by 13.79% at 75,180 units, while TVS Motor's scooter sales grew by 46.06% in July at 38,453 units. Hero Honda's scooter sales jumped by 39.87% to 24,776 units last month.
The commercial vehicles segment carried forward the upward trend that began in July 2009, with sales in July going up by 36.99% to 51,481 units from 37,580 units in the year-ago period, according to the latest SIAM data.
Light commercial vehicle sales rose 25.28% in July to 26,912 units from 21,481 units. Medium and heavy commercial vehicle sales surged by 52.61% to 24,569 units compared to 16,099 units in the same month last year.
Three-wheeler sales during July were up 25.44% at 45,373 units compared to 36,171 units, SIAM added.
Prepaid cards and mobile-money solutions are being enlisted in the drive towards financial inclusion; consumer adoption, business viability and regulatory issues remain hurdles in this effort
The efforts towards bringing the unbanked and marginalised section of the society into the mainstream economy by enabling access to basic financial services is high on the agenda of the government. Projects like 'Aadhaar' - the unique ID solution for the masses - and enlisting the services of business correspondents (BCs) to open 'no-frills' accounts for rural folk have already been set in motion. But where do we stand in terms of adoption and feasibility of these services?
Various experts in the banking, electronic payments and telecom industries are of the opinion that there is much more to the idea of financial inclusion and that various challenges still exist in this effort. On the occasion of the 3rd Financial Inclusion & Digital Payments Conference organised by the IAMAI (Internet and Mobile Association of India), industry experts spoke about the hurdles in the process of financial inclusion and whether solutions like prepaid cards and mobile money can be effectively harnessed to aid in the efforts.
Kamaljit Rastogi, head products, FINO, a key service provider to the micro-banking industry said, "Opening a bank account itself is a huge challenge. It has taken us nearly four years to create some sizeable impact in this area. Once the bank account is opened, it has to be sustainable. How do we recover the costs? We need to offer multiple products like savings, remittances, insurance, loans etc over this channel to make sufficient money to make the whole network sustainable. If the customer is not making transactions, saving and withdrawing money or taking loans, then it is merely a dummy account."
Pointing out that nearly 70% of such bank accounts remain inoperative after opening, BR Bhat, general manager, Corporation Bank, said, "Merely opening no-frills accounts is not financial inclusion. Banks should not just stop at opening an account for the rural people. We need to understand their needs, create awareness among them and help in their economic upliftment."
Sudhakar Ramasubramanian, chief executive officer, Aditya Birla Finance, said, "Financial inclusion is not necessarily a rural subject. Around 50% of urban India is still excluded from the system. So the problem has to be discussed not only in terms of rural reach and distribution perspective, but also the urban dimension."
He pointed to the success of micro-finance institutions over the past few years, and how they have managed to cover close to 30 million people by not worrying about the costs. Shekhar Srivastava, head marketing, ItzCash Card said, "For moving the marginalised economy to the mainstream banked economy, we need to create a model that works cohesively between banks and non-banks; collaboration between various agencies is essential in this transition towards a cashless economy."
Naveen Surya, chairman, Digital Payment Committee, IAMAI, said, "There is a need for multiple business models besides the business correspondent /business financial (BC/BF) model towards financial inclusion. Globally, pre-paid cards and digital payments have helped move from cash to cashless society and we are confident that this can be successfully implemented in India with the right business models and regulatory approvals."
The issue of consumer adoption needs to be addressed before digital payments can really take off in this country. Pankaj Sethi, president, corporate strategy & services, Tata Teleservices said, "The customer is always in search of convenience when it come to making payments. Also, some value must be offered to the customer in the form of additional services surrounding payments. Otherwise, adoption will not come easily."
Probir Roy, co-founder, Paymate, agreed that there is a need to incentivise people to adopt such services by providing them additional benefits in terms of easy credit of NREGA payouts, ticket bookings, etc.