India, China see record car sales

Mumbai, Feb. 9: A day after the Indian government upped the growth outlook for FY10, the society of Indian auto makers (SIAM) came out with another set of positive numbers.

Over 11 lakh cars were sold in India in the month of January, the industry body says, the highest ever. This is almost 45 per cent higher compared to the last year. Meanwhile, the month of January has also seen record high car sales in neighboring China. China Association of Automobile Manufacturers (CAAM), an industry body, said that total automobile sales in the country for January 2010 added up to 1.6 million. Car sales for the month stood at 1.34 million, more than double the number last year. In 2009, China overtook US as the world’s largest automobile market.

Despite the global slowdown, the past few quarters have turned out well for automakers as well as the larger economy in China and India. The Indian government announced that GDP growth for FY10 will be 7.2 per cent. The national statistics bureau in China said that the country’s economy expanded at 8.7 per cent in 2009. In case of India, economists are projecting growth of 8-8.5 per cent for the coming fiscal while China expects to clock double digit growth for 2010.

Meanwhile, the Indian economy is also witnessing its highest inflation in the recent months. So far, the Reserve Bank has not acted on interest rates to keep inflation in check, but with economic growth strong, the likelihood of an intervention by RBI is increasing. In the latest credit policy in January, RBI acted to pull out excess money from the financial system.