January domestic passenger car sales slide

Despite low interest and fuel costs, domestic passenger car sales stood flat in January, industry data showed on Friday.

According to the Society of Indian Automobile Manufacturers (SIAM), passenger car sales last month was marginally down by 0.72 percent.

The Indian automobile industry sold 168,303 units in January 2016, compared to 169,527 units in January 2015.

The industry data showed that the total passenger vehicle sales, which include cars, utility vehicles and vans, inched up by 0.61 percent to 232,016 units in the month under review.

However, the data disclosed a 17.53 percent sales growth in the overall commercial vehicles segment, which is a key indicator of economic activity.

The commercial vehicles segment off-take for January stood at 61,683 units.

Off-take of three-wheelers too clocked a healthy growth of 11.50 percent to 43,677 units last month.

Overall, sales of two-wheelers, which includes scooters, motorcycles and mopeds, stood in the flat-to-positive territory.

The two-wheeler segment's sales marginally rose by 2.63 percent to 1,362,881 units.

Product-wise, scooter sales in the month grew by 7.85 percent to 436,707 units.

In contrast, motorcycle sub-segment sales, logged a miniscule growth of 0.44 percent to 872,325 units.

Moped off-take declined by 1.25 percent to 53,849 units.

Besides, overall exports across categories rose by 3.80 percent to 276,517 units which were shipped out during last month.

Total automobile sales last month were higher by 3.03 percent to 1,700,257 units from 1,650,227 units sold in January 2015.

Industry observers pointed out that new launches in the small car and compact SUV (sports utility vehicle) segment have shown growth while diesel ban on bigger vehicles in the NCR (national capital region) negatively impacted some OEM (original equipment manufacturer) numbers.

"Going forward, increase in rural demand is critical for sustainable growth in the auto industry. Hopefully, the upcoming budget will address the issue and revive the rural demand by focussing on infrastructure, agriculture and stimulating overall investment activity in the economy," said Abdul Majeed, partner with Price Waterhouse, on the sales figures announced by SIAM.

"In addition, low fuel prices, incentive for replacing old vehicles, reduction in the interest rates as well as increase in personal disposable income for certain section of customers will help the auto industry to grow better in 2016-17."

Majeed said the sales growth in medium and heavy commercial vehicles came on the back of replacement demand and additions to the existing fleets.

"Anticipated increase in economic activities will help boost the demand for freight in the coming quarters."

He added that the two-wheeler segment saw growth in both scooter and certain high-end motorcycles, especially in the range of 250-500 cc- due to changing customer preferences.