Passenger car sales gear down by 0.7%

Drop first time in 15 months in January

Passenger vehicle sales hit the slow lane in January, as sales dropped for the first time in 15 months. According to data released by Society of Indian Automobile Manufacturers (SIAM), domestic sales of passenger vehicles declined 0.7 per cent to 168,303 units in the month of January as demand slowed. Experts believe the decline was due to bunching up of demand in December as higher discounts were offered then. Price increases that automobile makers took in January may have also hit demand in January.

Production of passenger cars also slipped by 6.4 per cent year-on-year to 206,183 units in January. While passenger car sales declined, that of utility vehicles and two-wheelers grew 3.4 per cent and 2.6 per cent, respectively. Two-wheeler sales growth has been primarily driven by scooters, while sales of motorcycles remained flat.

According to SIAM data, exports of passenger vehicles also faltered during the period. In January, exports of passenger cars dipped 19 per cent year-on-year to 33,909 units. However, exports of utility vehicles jumped 150 per cent to 7,983 units. Overall passenger vehicle exports declined 6.7 per cent in January.

Sales of medium and heavy commercial vehicles (MHCV) continued to report robust double-digit growth. MHCV sales in January grew 33.6 per cent to 28,533 units.

As indicated by some commercial vehicle manufacturers, the decline in sales of light commercial vehicles may have reduced. Sales of light commercial vehicles grew 6.5 per cent compared to the corresponding month in the previous year. In January, Maruti Suzuki's sales remained flat compared to the corresponding month in the previous year.

According to India Infoline Research, Maruti Suzuki's mini segment declined 4.3 per cent year-on-year and the mid-size segment declined 9.6 per cent year-on-year (led by fall in sales of Ciaz premium sedan), compact segment saw a modest growth of 1.8 per cent YoY and UVs grew by 26.2 per cent YoY (S-Cross and the new Ertiga). As for two-wheelers, the new year has brought in some cheer as growth has returned. Almost all companies reported strong sales other than Hero.