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Automobile makers have exited 2017-18 on a strong note, with most segments reporting a strong double-digit growth in domestic sales.
With the exception of passenger vehicles, which grew at 7.89 per cent, segments, including commercial vehicles, two and three-wheelers, have grown in double-digits. Sales of passenger and commercial vehicles, two and three-wheelers hit a new record during the year.
Industry body, the Society of Indian Automobile Manufactures (Siam), expects passenger vehicle sales to grow at a high single-digit in 2018-19, while commercial vehicles are likely to grow at low double-digit. Within two-wheelers, motorcycle sales could moderate in the current fiscal.
Passenger vehicles (cars, utility vehicles and vans) closed the year with sales of 3.28 million units, growing at 7.89 per cent, against 9.23 per cent in 2016-17. Cars grew at 3.33 per cent to 2.17 million units, while utility vehicles expanded at a healthy 21 per cent to 0.92 million units. Total production of passenger vehicles crossed 4 million for the first time during the year in March, while sales grew 6.38 per cent to 300,722 units. Around 747,287 units were exported.
The automobile industry expanded even as it was grappling with the after effects of demonetisation and challenges from the transition to the goods and services tax (GST) from July 2017 and the shift to Bharat Stage IV emission norms (in case of two-wheelers and commercial vehicles).
“We ended the year on a positive note with almost every segment posting growth, except passenger buses. This reinforced the fact that despite having a difficult year, the auto industry showed resilience,” said Vishnu Mathur, director-general, Siam.
The contribution of top 20 cities that generate about 50 per cent of passenger vehicle sales have shown slow growth in the last four to five years. “What we are seeing now is more demand from smaller towns and semi-urban areas. Many major automobile companies are trying to foray into those markets,” Mathur added.
Source: SiamCommercial vehicle sales made a strong comeback with 20 per cent growth in 2017-18, significantly higher than 4 per cent in 2016-17. Within the segment, sales of medium and heavy vehicles grew 12.48 per cent to 340,313 units, while those of light vehicles expanded at over 25 per cent to 516,140 units. Three-wheeler sales also hit a new record of 635,698 units, growing 24 per cent from the previous year.
Sales of two-wheelers in the world’s biggest market recorded a new high of 20.19 million units last year, growing at 14.80 per cent, compared with 7 per cent in 2016-17. Motorcycle sales grew 13.69 per cent to 12.61 million units, while scooters expanded 20 per cent to 6.71 million units. Mopeds, however, declined over 3 per cent to 0.85 million units.
Fiscal year 2017-18 was a milestone year for the Indian automotive industry, said Rakesh Batra, partner and automotive leader at EY. “Sales volume built upon last year’s momentum to register double-digit growth for the first time since 2011-12, partly aided by improvement in the rural economy and partly due to the demonetisation-influenced low base in the second half of 2016-17.