Purchases of utility vehicles (UVs) spurred a 6 per cent increase in overall passenger vehicle sales in May while relative weakness in the drought-affected rural economy continued to damp demand for small cars and motorcycles. Passenger carsales declined 0.86 per cent to 1.59 lakh units last month, while the UV segment surged 35.9 per cent to 58,793 vehicles lifting total passenger vehicle sales to 2.32 lakh units, as per data released by Society of Indian Automobile Manufacturers (SIAM). “Car sales were slightly negative last month as some of the sedan sales are getting transferred to the utility vehicles segment with companies bringing out compact SUVs,” SIAM Director General Vishnu Mathur said. “We should now not see these two as different segments but look at passenger vehicles as a whole,” Mr. Mathur said.
The sales growth was driven by the likes of Maruti Suzuki Brezza, Hyundai Creta, Mahindra’s TUV300 and KUV100.
Exports of passenger cars also fell 11.24 per cent, while those of utility vehicles rose by 83.8 per cent. Overall, exports of passenger vehicles grew by 0.48 per cent to 51,522 units.
Mr. Mathur added that uncertainty about diesel vehicles had also impacted sales. “Share of diesel cars in total sales came down to 28 per cent in April from 34 per cent for the last financial year,” he said. Total two-wheeler sales in May rose 9.75 per cent to more than 5.15 lakh units. While motorcycle sales rose 3.34 per cent to about 9.85 lakh, scooters registered a growth of 25 per cent to almost 4.55 lakh units.
Motorcycles “Motorcycles are hit the most by sluggish rural demand. From a growth of 16.2 per cent in April, it has come down to 3.34 per cent in May. Hopefully, with good monsoons this year, we might see growth trend from August onwards. Scooters on the other hand signify urban demand, which continues to be good,” Mr.Mathur said.
Commercial vehicles continued to show strong growth, with sales rising 16.9 per cent to 57,089 units. “The recovery in this segment has been strong for the last many months. This also signifies that the economy is also improving, we are seeing activity in infrastructure sector and mining sector.”
Exports of commercial vehicles grew almost 5 per cent to 9,150 units, while two-wheeler exports rose by 2 per cent to almost 2.17 lakh units.
The automobile industry has also approached the Centre to consider a rupee-based payment mechanism for trading with African nations, SIAM Deputy Director General Sugato Sen said.
Trading in rupee terms “We have approached the Ministry of Commerce for rupee trade with African countries as we are facing a challenge in dollar trade in these big export markets like Algeria and Nigeria,” Mr. Sen said.
African countries are facing issues with dollar payments mainly due to issues such as falling prices of crude and commodities.
Of the total automobile exports of about $8.86 billion in 2015-16, Africa alone accounted for 30-35 per cent of shipments in value terms.
