Festive cheer for car & two-wheeler makers

Strong festive demand and improved sentiments have helped car and two-wheeler segments report a strong double-digit domestic volume growth for the third consecutive month. Passenger vehicle sales in September grew 20 per cent while two-wheelers surged 21 per cent.

Data released by the Society of Indian Automobile Manufacturers (Siam) on Friday show a strong revival in demand in both these segments, which now look well placed to clock a double-digit growth in FY17. September growth was supported by a festive demand as well.

According to the Siam data, passenger vehicle (cars, vans and utility vehicle) sales zoomed 20 per cent in September on the back of record monthly sales by market leader Maruti Suzuki.

The company, which enjoys a 47 per cent market share, grew domestic sales by 29 per cent last month to 137,277 units. Others such as Mahindra & Mahindra, Tata Motors and Renault also supported growth. In the first half of FY17, the industry grew 12 per cent. With the current momentum, the industry looks well placed to post a double-digit growth for the whole year.

The 21 per cent growth in two-wheeler volumes last month, driven by increase in scooters (30.60 per cent) and motorcycles (16.33 per cent), was on the back of double-digit growth by leading players such as Hero MotoCorp and Honda Motorcycle & Scooter India. TVS Motor and Bajaj Auto also posted double-digit growth in domestic sales.

The six-month growth (April-September) for the two-wheeler sector stood at 17.47 per cent. Abdul Majeed, partner at Price Waterhouse and an auto expert, said the growth this year would be robust across segments.

"This is due to the combination of many positive factors such as growth in the economy, better cash flows in the hands of customers, increased public investment in infrastructure, new launches, and better monsoon," he said.

Overall, the commercial vehicle segment saw a decline of two per cent in September. However, the light commercial vehicle space saw a 16.43 per cent growth.

But, the medium and heavy commercial vehicle continued to decline, posting a 20 per cent drop last month. Majeed expects this segment to grow "once private investments speed up in the economy".

Three-wheelers, used mainly as passenger carriers, continued to post growth. In September, sales grew nearly five per cent. Overall industry sales (all vehicles) grew a little over 21 per cent to 1,868,993 units in September.