Vehicle sales rise 7% in July due to transporters strike, high base effect

New Delhi: Total vehicle sales increased 7% to 2,244,875 units in July, against a year ago, due to the high base in the corresponding quarter and inventory pile-up by vehicles manufacturers ahead of the festival season beginning August, data released by Society of Indian Automobile Manufacturer showed. The strike called by truck owners also hit vehicle supply.

Total passenger vehicle sales decreased 2.71% year on year to 290,960 units mostly due to the high base effect. In the year-ago period, carmakers pushed significant inventory into dealerships due to the introduction of the Good and Services Tax. Besides, July does not usually generate healthy volumes since customers prefer to wait for the festival season to buy vehicles. Utility vehicle sales dropped 8.95% to 79,092 units, while passenger car sales fell 0.45% to 191,979 units.

Contrary to expectations, commercial vehicle sales, especially in the heavy and medium duty vehicles, continued to grow in double-digits, despite apprehensions about a possible decline following the introduction of the new axle norms by the government. On the back of sustained improvement in economic activity, sales of medium and heavy commercial vehicles increased 24.5% to 28,299 units. Unlike passenger vehicles, the commercial vehicle segment is still a couple of months away from experiencing the high base effect.

Light commercial vehicle sales also increased 32.88% to 48,198 units.

“Commercial vehicles are expected to do well because of economic activity, especially in the infrastructure sector,” according to Sugato Sen, deputy director general, Siam.

Motorcycle sales also grew 9.67% to 1,150,995 units on the back of a revival in demand in rural markets, which still contributes bulk of motorcycle sales. Scooter sales, on the other hand, continued to be sluggish, since sales picked up by just 5.1% to 598,976 units during the month.

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