Passenger vehicles in July: Launches, low base rev up sales 11%

New launches and a low base helped the passenger vehicle sector report sales growth of over 11 per cent in July year-on-year, even as a few players continued to see sharp declines in sales.

Marred by declining motorcycle sales, two-wheeler sales growth was flat in the month despite a strong 15 per cent growth in scooter sales.

The commercial vehicle segment grew over eight per cent, led by the medium and heavy commercial vehicles.

Within the passenger vehicle segment, cars grew by a sharp 17.5 per cent, driven by Maruti Suzuki, Hyundai and Honda. Hyundai launched its sport utility vehicle Creta in July, and Honda launched the new Jazz.

Utility vehicle sales growth remained flat at 0.4 per cent while van sales declined nearly nine per cent.

In the April-July period, sales of passenger vehicles grew 7.5 per cent.

Abdul Majeed, partner at PwC, said growth in sales was coming from urban areas. “With the weak global economic outlook, commodity as well as oil prices are expected to remain soft. With a better-than-expected monsoon, inflation is expected to remain under control, hopefully there will be an ease in monetary policy in six months. The government is also planning to start the investment cycle. These factors should help the Indian economy to grow, and this will help the automobile sector.”

Weak sentiment in the rural market has been affecting sales of two-wheelers, especially motorcycles. Two-wheeler sales grew by a mere 0.14 per cent in July, helped by scooters. Motorcycle sales, which form the bulk of the two-wheeler sales, declined 6.4 per cent. In the April-July period, scooter sales grew by 9.5 per cent and motorcycle sales dipped by three per cent.

Vishnu Mathur, director-general, Society of Indian Automobile Manufacturers, said the performance of the two-wheeler sector was pulling down the combined growth of the automobile sector, as its share in terms of volume was a high 80 per cent. The overall automobile sector — passenger vehicles, commercial vehicles, three-wheelers and two-wheelers — grew 1.4 per cent in July and 1.3 per cent in the April-July period.

Sales of medium and heavy commercial vehicles increased 29.5 per cent to 23,061 vehicles in July. The April-July increase is also impressive at 25 per cent. The sector is hopeful of sustained demand, which is largely driven by fleet replacement.

Light commercial vehicle (LCV) sales continued to decline on challenges in financing and loan defaults. LCV sales declined about four per cent in July and 5.2 per cent in the April-July period.

The sector is anticipating a gradual recovery in demand of passenger vehicles and sustained growth in medium and heavy commercial vehicles. Challenges will remain in the two-wheeler segment