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A low base effect has helped the Indian automobile industry report impressive domestic sales growth of 16% in the passenger vehicle segment, the highest in past 30 months. The medium and heavy commercial vehicles (M&HCVs) also saw strong growth rate of 25%, while the sale of two-wheelers remained flat, impacted by a declining trend in motorcycles.
Data released today by the Society of Indian Automobile Manufacturers (SIAM) showed that sale of passenger vehicles grew to 217,949 units in April vis-a-vis same month last year per centage wise, the 16% jump is the highest in last thirty months. On a sequential basis, however, sales dropped 11% from 244,395 units sold in March 2015.
The growth in passenger vehicles is not broad based and driven only by companies like Maruti, Hyudai, Honda and Toyota Kirloskar. Mahindra & Mahindra’s sales remained flat while General Motors and Ford witnessed decrease of 35 and 26%, respectively. Exports of passenger vehicles, accounting for less than one-fifth of sales, also grew by a handsome 21%.
“The numbers in passenger vehicles indicate a trend of recovery while growth is still away. The medium and heavy commercial vehicles, which were on a decline for over two years, have seen nine months of consecutive growth”, said Vishnu Mathur, Director General, SIAM. He added that growth in M&HCVs shows there is an uptick in industrial and mining activity.
Amit Kaushik, Principal Analyst - IHS Automotive, said the current economic environment represents a mixed scenario with inflation easing out but weak rural demand coupled with high interest rates. “It can potentially put pressure on vehicle sales in the coming months”.
Domestic sale of two-wheelers, marred by income uncertainties in rural India, remained flat. Sales, however, are down on a sequential basis, showing a drop of nearly 3% from March 2015. Within the two-wheeler segment, motorcycles (which account for bulk of the two-wheeler market) sales remained in the negative zone, declining 2.77% from same month last year. Motorcycle exports slipped 6%.
Industry leader Hero MotoCorp saw its sales of motorcycles dip 5.44% while sales at Honda Motorcycle and Scooter India (HMSI) remained flat. Scooters, however, grew over 5% in April. HMSI, the largest player in scooter, grew its scooter sales by 16% while rival Hero MotoCorp saw sales dip by over 10%. Yadvinder Singh Guleria, senior vice-president and operating head (sales and marketing) at HMSI said last week that the company is closely watching the economic situation in the rural areas. “There is a caution”. A slowing rural market, impacted by damage to Rabi crop and projection of a sub-normal monsoon, is impacting motorcycle sales.
An interesting trend is seen in the passenger carrier three wheeler segment where exports zoomed 79% to 47,333 units, much higher to domestic sales of 25,607 units. Bajaj Auto, the market leader, saw exports more than double to 36,361 units.
