Passenger vehicle sales decline 0.3%

Inventory correction led to drop: SIAM

CHENNAI, TAMIL NADU, 20/08/2012: The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world with an annual production of more than 4.3 million units in 2012. According to recent reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil), growing 18 to 20 per cent to sell around three million units in the course of 2012-2013. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads in Chennai on August 21, 2012. Photo: S. R. Raghunathan

Domestic passenger vehiclesales in the country dipped marginally by 0.3% in October on account of inventory correction by car makers, industry body SIAM has said.

As per the data released on Friday, sales of passenger vehicles, which includes cars, utility vehicles and vans, declined to more than 2.79 lakh units last month from more than 2.80 lakh a year ago, the first decline in four months. While car sales were down 5.32% over 1.84 lakh vehicles, those of utility vehicles were up 12.44% to 79,323 units.

‘Temporary blip’

“The decline is not necessarily a reflection of market sentiment. It is a temporary blip...The decline in sales is more to do with inventory correction by the manufacturers,” SIAM director general Vishnu Mathur said.

There was inventory build up at the dealerships ahead of the festival purchases and in October the manufacturers reduced dispatches, he added.

The last time passenger vehicle sales declined this year was in June (11.21%).

“After a blockbuster September 2017, there is a very insignificant dip in the overall passenger vehicle sales numbers, primarily due to high pre stocking for Diwali which fell in the earlier part of the month,” Sridhar V, Partner, Grant Thornton India LLP, said. He pointed out that passenger cars had lost “some sheen”, but utility vehicles kept the growth momentum continuing.

“Globally, there is a shift to SUV, which is being evidenced in India as well. However, the impact of increase in cess could have also affected the overall growth in PVs. LCVs have shown a lag effect with sales improving after MHCVs had shown growth arising out of BS IV conversions earlier this year. Dip in two wheeler sales appears to be a post festival hangover. Overall the last seven months has shown a high single digit growth and could improve further during the course of the year.”

Sales of two-wheelers fell by 2.76% to more than 17.5 lakh vehicles in October. This is the first decline in the segment since February this year. While motorcycle sales declined by 3.5% to more than 11.04 lakh units, scooters sales grew marginally by 0.53% to more than 5.71 lakh units.

The decline in sales of passenger vehicles and two-wheelers pulled down the total vehicle sales across category by 1.79% to more than 21.62 lakh units.

As per the data, total commercial vehicles sales rose 6.44% to 69,793 units in October. Sales of medium and heavy commercial vehicles grew 0.86% to 26,158 units, while LCVs saw a growth of more than 10% in sales to 43,635 units.