Car sales increase 6% in August

Commercial vehicles continue to grow, two-wheelers impacted by sharp decline in motorbike sales despite growth in scooter sales

Sales of cars in August grew six per cent over the same month last year, according to data released by the Society of Indian Automobile Manufacturers (Siam) on Thursday. Sales of passenger vehicles (cars, utility vehicles and vans) grew four per cent in August over the same month last year, even as the sequential growth compared to July remained flat in spite of the two new launches in August.

Commercial vehicles continued to grow, helped by high double-digit growth in medium and heavy commercial vehicles (M&HCV). Two-wheeler segment continued to be impacted by a sharp decline in motorcycle sales irrespective of the growth seen in scooter sales. Two-wheelers declined three per cent on the back of a near-10 per cent drop in motorcycle sales. Sale of scooters grew 16 per cent in August. Motorcycle demand took a beating due to a weakness in rural economy, triggered by deficit rainfall.

“We are on a slow and steady but not a very explosive growth path. This is the 10th consecutive month of increase in car sales,” Siam Director General Vishnu Mathur said.

Sale of cars grew six per cent, while utility vehicles declined by four per cent. Sale of vans grew about eight per cent. Maruti Suzuki launched the S-Cross in August and Ford launched the Aspire. But they managed to sell only 222,476 passenger vehicles in August, a tad above the 222,368 units sold in July despite the launches.

“Out of the 17 players in passenger vehicles segment, nine witnessed growth in August. Gradually, growth may become even broad-based,” Mathur said, adding a cut in interest rates could help boost demand.

Commercial vehicle sales rose 7.6 per cent in August, fuelled by a 35 per cent growth in sale of M&HCV, helped by demand from fleet replacement and pick up in mining activities. Sale of light commercial vehicles remained in the negative zone, declining about seven per cent.  

Experts remain hopeful of a pickup in demand in the upcoming festive season. Kumar Kandaswami, Senior Director, Deloitte in India, said, “The passenger car sales, particularly at the entry segments, are likely to be better this festival season compared to last year. This will be driven by low inflation and low cost of ownership, relative to last year. In fact, there may be a spike in some rural markets like north western states where monsoon has been good. The launches that are lined up might help volume growth.”