Author: Aaron Chaze

Roundup

By Aaron Chaze

india_1

On the move: Car sales jumped significantly in India

Auto sales in India increased sharply over the past year, with the Society of Indian Automobile Manufacturers claiming sales have jumped by 50% since January 2009. Commercial vehicle sales volumes grew by 130%, utility vehicles by 54% and passenger cars by 32.3%. Total auto sales were 241,000 units for January 2010, 145,000 of which were passenger cars. Exports of autos also increased by 83% year on year to nearly 43,000 units. According to industry analysts, low financing costs and an anticipated hike in sales taxes for the 2010-2011 fiscal year (that stretches from April to March) are pushing auto sales into higher gear. Sales of motorcycles—the largest segment of India's auto industry—climbed by 43% from a year ago to 650,000 units in January 2010. Between April 2009 and January 2010 composite industry volumes were higher by 24% to a total of 10 million units from the corresponding period a year ago.


Given the aggressive growth being reported by key sectors, it is not surprising that the Central Statistical Organization (CSO) says it expects India's economy to expand by 7.2% for the year ending March 2010. Over the year to March 2009, the economy grew by 6.7%. India's central bank had earlier announced that it expected GDP growth to be 7.5% for the year ending March 2010. For the July-September 2009 quarter, annualized GDP growth was 7.9%. However, the central bank also expects inflation to rise to 8.5% in the January-March 2010 quarter from the 7.3% it reached in December 2009.


The rising foreign appetite for Indian assets is prompting companies to announce equity issues. According to J.P. Morgan's Indian investment banking unit, the total expected stock sales for 2010 is around $30 billion, a 50% increase over 2009, when Indian firms raised $20 billion, of which $4 billion was IPOs and the rest follow-on offerings. The bulk of the offerings in 2010 is expected to come from government-run companies and companies in the power and property sector. National Thermal Power Corporation (NTPC), India's largest thermal power generator, is expected to raise $2.6 billion.