Passenger vehicle sales up 2.7% in June

Segment growth during April-June at 6.7%

Passenger cars, which form bulk of the domestic passenger vehicles (PV) market, declined 5.2 per cent in June this year, compared to the same month last year. The passenger vehicle segment as a whole, however, witnessed a 2.7 per cent growth, on the back of a 35 per cent jump in utility vehicles (UV).

Cars, utility vehicles and vans together form the passenger vehicle market.

In the April-June 2016 quarter, passenger vehicle sales grew 6.7 per cent, again supported by a strong 38 per cent growth in UV sales even as car sales fell 1.41 per cent. Cars account for 68 per cent of the PV market, while UVs bring another 25 per cent. The rest comes from vans.

“Customers are showing preference for utility vehicles now. The emergence of the compact SUV (sports utility vehicle) segment is changing the pattern of sales growth in PV segment. While we are witnessing small growth in passenger car sales, the UV sales are seeing high growth,” said Vishnu Mathur, director-general, Society of Indian Automobile Manufacturers (Siam), after the industry body announced June data on Monday. UV sales are riding on a series of new launches done by top companies such as Maruti Suzuki, Hyundai and Mahindra & Mahindra in the past year.

In June, two-wheeler sales grew at a double digit rate of 12.26 per cent.

Within two-wheelers, motorcycles grew 7.52 per cent while scooters increased by 21 per cent. All leading players, including Hero MotoCorp, Bajaj Auto, and Honda Motorcycle & Scooter India posted growth. During the first quarter, two-wheeler sales grew 14.26 per cent. Scooter sales increased 27 per cent while motorcycles improved nine per cent. The two-wheeler segment, which had seen a low single-digit growth of three per cent last year, is expected to do much better in FY17 on good rainfall and implementation of increased wages of government employees.

Commercial vehicle (CV) sales saw some moderation in June. Medium and heavy commercial vehicle (M&HCV) sales grew 1.9 per cent last month. Light commercial vehicles (LCV) performed better with an increase of 8.3 per cent. During the quarter, M&HCVs grew 14.5 per cent, while LCVs rose 12 per cent. “Sales of CV sales will remain constant considering the moderation in vehicle replacement and pent-up demand. This segment will see significant growth once the economic activity picks up,” said Abdul Majeed, partner, Price Waterhouse.

Total vehicle sales in the country (all categories) grew 10.7 per cent last month. The first quarter growth was even better at 13.42 per cent.