Riding on two wheelers, auto sale up 12.6% in October

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Propelled significantly by a double-digit surge in two-wheeler sales, the overall domestic auto sales rose by 12.56 per cent in the month of October to 1.86 million units against the same period last year despite all major categories such as commercial and passenger vehicle sales remaining in the negative zone. Two wheeler sales, which constitute over 80 per cent of the overall market increased by 18 per cent in October over the last year. Purchases around the festive season in addition to the rural demand which is being fuelled by a good monsoon also buoyed the numbers which have remained weak for several months now.

According to statistics released by auto industry body, Society of Indian Automobile Manufacturers (SIAM) on Tuesday, passenger vehicle sales dropped by 2.01 per cent in October to 2,39,137 units while the total commercial vehicles declined by 19.77 per cent to 53,533 units. SIAM tracks sales till the dealer level and the number do not denote the actual purchases by the consumers.

Within the commercial vehicles segment, the medium and the heavy commercial vehicle sales stood at 14,261 units and declined by 31.62 per cent in the last month. Vishnu Mathur, director general of SIAM said that the commercial vehicle sales are a reflection of the health of any economy and this has been the twentieth consecutive month of decline in their sales.

Domestic Sales in October
	October 2012	October 2013	%age Change
Two Wheelers	1,285,015	1,516,291	18%
Passenger Vehicles	2,44,054	2,39,137	-2.01%
Commercial Vehicles	66,722	53,533	-19.77%
Three Wheelers	55,237	49,425	-10.52%
Total	1,651,028	1,858,386	12.56%

“Demand is only coming from the replacement market as major sectors such as mining and infrastructure continue to be affected.” However, the 31.62 per cent drop in medium and the heavy commercial vehicle was slightly better than the 41.78 per cent and 38.24 per cent decline recorded in the month of September and August, respectively.

Despite the fact that the passenger cars recorded the highest sales in the month of October, and there has been some moderation in their decline since the beginning of this year, Mathur said that it is difficult to say if the market has bottomed out. “In the last two months, there has been some moderation due to strong rural demand etc though it is difficult to say if the uptick is sustainable.” The last time passenger car sales declined was in the year 2002-03. Mathur also added that some companies have also been doling out discounts in order to push sales however, it is not leading to a “profitable growth.”

The production numbers too mirrored the trend of the sales figures. While the production of passenger vehicles declined by 4.81 per cent to 2,76,870 units that of commercial vehicles dropped by 22.57 per cent to 58,257 units. In line with the sales number, production of two-wheeler showed a growth of 21.21 per cent to 1.66 million units.