December sees double-digit rise in passenger vehicle sales

Two-wheeler sales continue to be under pressure, with volumes down 3.1% over a year before in December

Automobile companies have reported sales growth of 10.5 per cent in December 2015 in passenger vehicles (PVs), helped by new launches and declining fuel prices. According to data from the Society of Indian Automobile Manufacturers (Siam), 230,960 units of PVs — cars, utility vehicles and vans — were sold.

There has been double-digit growthfor three months, helped by festive demand, resulting in growth of 9.05 per cent in the April-December period, the first nine months of this financial year.

“Positive consumer sentiment, new launches and increase in disposable incomes are driving up car sales. The cost of ownership has been stable for petrol vehicles and come down marginally for diesel vehicles,” said Sugato Sen, deputy director- general, Siam.

As in earlier months, the surge in PVs is being led by strong volume growth from the two at the top, Maruti Suzuki and Hyundai. Ford and Renault have also shown strong volume growth. Two-wheeler sales continue to be under pressure, with volumes falling 3.1 per cent from a year ago. Within this segment, sales of motorcycles saw a deeper cut of six per cent, due to weakness in rural markets. Scooters grew about three per cent.

“The industry will close this year with good growth in passenger cars, commercial vehicles and scooters. However, PV sales growth in the January-March quarter will be lower than the festive season and people will gradually shift from diesel vehicles to petrol vehicles because of a lot of uncertainty in diesel regulation,” said Abdul Majeed, a partner at Price Waterhouse and an expert on the sector.

Sales of medium and heavy commercial vehicles (CVs) continue to see high double-digit growth. In December, sales rose 19 per cent. Replacement demand and a rise in mining and construction activity were among the reasons.

Light CV (LCV) sales grew 5.6 per cent in December. Used for intra-city transport of goods and passengers, they’d shown a decline in recent months.

Siam expects LCV sales growth to be flat this financial year. In the April-December 2015 period, their sales declined 3.4 per cent.

“With continued high levels of non-performing assets, the financing scenario did not recover completely in FY16, as financiers continue to concentrate on loan collections. The recovery in consumption demand is delayed,” Siam said.