Sales of passenger cars grew for the third month in a row in July with an increase of 5 per cent, signalling a gradual recovery in the automobile market that has been reeling under prolonged slowdown.
Riding on the improved consumer sentiment, domestic passenger car sales rose to 1.38 lakh units last month from 1.31 lakh units in July, 2013, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
Buoyed by the steady growth, improving sentiment and forthcoming festival season, the industry body is hopeful of single digit growth in the current fiscal for the industry.“We are seeing sentiments which have improved. The feedback that we have got from our members is that footfalls are back in the showroom. People are buying vehicles. As the economy revives, we are going to see higher growth in the coming months,” SIAM Director-General Vishnu Mathur said.
With more new models lined up for launches ahead of the festive season, they were hoping that there would be at least single digit growth this year, he added.
Mr. Mathur said, “In the first quarter of this fiscal (April-June), we have grown by 2.89 per cent. If the trend continues, we hope that we could end the year with a growth of anything between 5 and 10 per cent.”
Crediting the new government for the turnaround in public sentiment, Mr. Mathur said, “The very fact that there is a stable government at the Centre has improved the consumer sentiment. Besides, the reduced excise duty rates on cars have been extended and also the income tax rate has been reduced to an extent, putting more money in the pockets of consumers. All these have helped revive demand to an extent.”
In the two-wheeler segment, sales have been growing at a good pace. Total sales in this segment went up by 13.73 per cent to 12.87 lakh units in July from 11.32 lakh units in the same month of the previous year, according to SIAM data. While motorcycle sales during the month grew 6.17 per cent to 8.59 lakh units, scooter sales improved by 37.1 per cent to 3.72 lakh units.
Sales of commercial vehicles, a sign of economic activity in the country, continued to decline, falling 13.64 per cent to 47,765 units. However, SIAM is positive of a turnaround in the next 5-6 months. “This is the 15th consecutive month of decline in commercial vehicles sales. However, we have begun to see orders coming in. In the next 5-6 months, we should see some improvement in the segment, although it is going to be slow and a gradual recovery,” Mr. Mathur said.
Overall, vehicle sales across all categories registered a growth of 12 per cent at 15.86 lakh units in July as against 14,16 lakh units in the same month of 2013.
