The stock markets may have tanked, oil prices may have sky rocketed and interest rates may have gone up. But that has not stopped the common man from walking into a car dealership and driving home his set of dream wheels. Most car companies sold more cars in India during financial year 2007-08 than they have ever done before. And there’s one big reason for this: the onslaught of new models hitting Indian roads.

With more options on the table, customers have flocked to showrooms and the numbers tell the story. Maruti Suzuki rode strong with a 12% growth in sales. While small cars continued to dominate the company’s sales with a 13.4% growth, its brand new Maruti SX4 sedan helped it break the domination of Honda City in the mid-size sedan category.

And as a result, Honda, bound by capacity constraints for most part of the year, found it tough to keep up its sales during the year. But it was General Motors (GM) that recorded the highest growth in percentage terms. Again a new model the Chevrolet Spark coupled with some customer incentives and interesting variants garnered the numbers.

Next in line was Fiat, which saw a revival in sales thanks to its distribution tie-up with Tata Motors. But with just 3379 units sold over the year, the company still has a long way to go if it wants to make its presence felt. The newly launched diesel Palio with the 1.3 litre Multijet engine and the upcoming Linea and Grande Punto may just do the trick.

Another star attraction during the year was the Mahindra Renault Logan, an entry level sedan which gave the existing biggies a serious run for their money.

Perhaps the best validation of the fact that new model launches have driven sales comes from Tata Motors, which witnessed a decline in sales because it could not offer something new to its customer. During the year, company executives reiterated this lacuna, assuring customers that 2008 will be the year to watch out.

The refurbished portfolio includes the new Indica and the much-awaited Nano. Ford too had a similar story to tell. While there might be some sighs of relief in Dearborn, Michigan with the income of $2.3 billion from the sale of Jaguar and Land Rover, the falling sales in market like India must be a cause of worry.

Sales of new cars nose-dived last month by more than 23 percent from a year before, partly because early Easter holidays shortened the trading month.

Total new vehicle sales reported to the National Association of Automobile Manufacturers of SA (Naamsa) declined by 17.5 percent year on year to 47 778 units, with new car sales falling to 27 724 units.

Motor industry analyst Tony Twine, a director of Econometrix, said last month had two fewer trading days than in March 2007, or a 9 percent reduction in selling time.

He noted that growth in passenger vehicle sales had been in a downswing since October 2006, an early response to the interest rate hikes that began in June 2006. Car sales had fallen 30 percent in the 18 months since hitting an incredibly high point just before October 2006.

There was a huge dichotomy in the economy as downward pressure on consumers to prevent them spending contrasted with a ballooning business sector that was trying to sustain the fixed investment cycle.

Sales of new light commercial vehicles, bakkies and minibuses dropped to 16 616 units last month, a dip of 10.7 percent from March last year.

Medium truck sales rose by 2.6 percent to 1 321 units and heavy truck and bus sales leapt 9 percent to 2 117 units.

Nico Vermeulen, Naamsa’s executive director, said the data should be seen in context, because new vehicle sales in March last year represented one of the highest sales months on record and Easter holidays fell in March this year, reducing the number of selling days.

Jacques Brent, the vice-president for sales and market at the Ford Motor Company of Southern Africa, said sales last month were slightly up on February, but overall market sentiment remained unchanged with “tough times ahead”.

Brent said Ford had revised its forecast for total industry new vehicle sales downwards to 570 000 this year from 590 000.

Brand Pretorius, the chairman of McCarthy Motor Holdings, said the key reason for the much lower car sales was that both business and consumer confidence were under siege.

Current sales figures were not an accurate reflection of spontaneous demand, he added. They resulted from intense discounts, cash-back offers and subsidised interest rates that were stimulating the market artificially.

“We believe market demand is actually at a significantly lower level. Purely from a motor industry perspective, there is no need for a further interest rate increase, as demand has already slowed right down.”

Malcolm Gauld, the vice-president of sales and marketing at General Motors South Africa, said the significant cost push burden of a sudden deterioration in the rand meant pricing adjustments were unavoidable in the short term.