Ind-Ra: India's Auto Sales Continued Strong Growth in April 2018

In April 2018, domestic industry volumes grew by 17% yoy and 7% mom, according to India Ratings and Research (Ind-Ra) report on auto sector. Strong yoy growth was primarily led by lower volumes recorded in April 2017, especially in the commercial vehicles (CV) and two-wheelers (2W) segment.

The CV sales clocked a strong growth rate of 76% yoy on a low base of last year during this period. Sales plummeted in April 2017 on the back of transition to BS-IV emission norms from BS-III which led to pre-buying in March 2017 as original equipment manufacturers offered huge discounts to clear their stock. Inadequate supply of BS-IV compliant vehicles also affected the sales adversely. Hence, medium and heavy commercial vehicles sales volumes grew at strong 169% yoy in April 2018. Growth continued to be supported by macro-economic factors including road and infrastructure development in the country and strong demand from rural India.

Light commercial vehicles sales volumes exhibited double digit growth of 44% yoy, led by demand from consumption-driven and e-commerce sectors. Sales also benefitted from farm loan waivers which led to an increase in disposable income resulting in increased buying.

PV segment recorded a growth of 8% yoy in April 2018. Sales of utility vehicles, up 12% yoy, continued to gain from consumers' preference towards compact SUVs over Sedan. Growth rate in sale of cars was low at 5% yoy due to lower sale of entry-level cars as well as lack of new product launches during the month.

In April 2018, high double digit growth in motorcycles, up by 19% yoy, continued for the sixth month, mainly led by demand from rural market. Scooters recorded a steady growth of 13% yoy.

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