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Cars, 2-wheelers drive automobile growth to 7%

Business Standard:  May 11, 2017

New Delhi: Domestic passenger vehicle sales surged 14.68 per cent last month helped by strong growth of market leader Maruti Suzuki and others like Toyota, Honda and Tata Motors.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), Vehicle sales across categories registered an increase of 6.82 per cent to 20,30,476 from 19,00,848 units in April 2016.

Domestic passenger vehicles sales rose to 2,77,602 in April from 2,42,060 in the same month last year.

In a reversal, cars posted higher sales growth than utility vehicles. Domestic car sales posted their biggest monthly growth in one-and-a-half years at 17.36 per cent to 1,90,788. Utility vehicles grew by nearly 14 per cent last month.

"Factors like commissioning of new manufacturing plants and new model launches led to strong growth in the passenger vehicle segment during the month," said Sugato Sen, deputy director-general, SIAM.

He said the segment received a push with the commencement of operations at Suzuki’s Gujarat plant, which helped Maruti increase its sales by over 23 per cent last month. The Gujarat plant of Suzuki will contribute 150,000 vehicles to Maruti in 2017-18. Maruti sold 144,081 vehicles last month in the domestic market.

Sales of two-wheelers rose by more than 7 per cent in the domestic market last month to 16,74,796 from 15,60,308 in April 2016. Motorcycle sales were flat at 10,29,972 against 10,24,895 a year earlier. Scooters surged by 25 per cent to 586,886.

"Scooters are doing pretty well. Even in rural areas, people are increasingly going in for scooters," Sen said.

Growth in passenger vehicles and two-wheelers offset the declines in other segments. Sales of commercial vehicles were down 22.93 per cent to 41,490 in April, SIAM said. This was the steepest decline since January 2009, when volumes had contracted by 67 per cent.

Sales of medium and heavy commercial vehicles were most affected by the Supreme Court order on emission norms and their April volumes declined 55 per cent. Light commercial vehicle sales grew close to 2 per cent.

"After-effects of demonetisation still remain in the segment. Besides, there was pre-buying in February and March due to the coming into force of BS IV emission norms from April," Sen said.

Abdul Majeed, partner at Price Waterhouse, said April was a good start for the Indian automotive industry. “The pent-up demand is driving vehicle sales and the impact of demonetisation is wearing off. However, there are a few challenges ahead such as a smooth implementation of the GST and the monsoon,” he said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.