The sentiment seems to be improving for the struggling automobile sector with car sales growing by 3 per cent in May to 1.49 lakh units from 1.44 lakh units in the year-ago period.

Industry body Society of Indian Automobile Manufacturers (SIAM) attributed the growth to decline in negative sentiments on account of formation of new government at the Centre and also the cut in excise duty on vehicles. It, however, added that commercial vehicle sales, which are still in the negative territory, would take more time to recover.

“Over the last three months, there has been a gradual improvement in sentiment. Due to formation of a stable government at the Centre, coupled with reduction in the cost of cars due to cut in excise duty, consumer sentiments are looking up,” SIAM Director-General Vishnu Mathur said.

He, however, added that it was too early to say whether or not this signalled a change in downward sales trend.

“It is too early to say if this is start of a trend. It is imperative that we continue this sentiment and do not hurt it. We hope that the government will retain the current excise rate beyond June 30,” Mr. Mathur said.

Besides, the industry body, in its recommendations to the government for the budget, has asked for speedy implementation of Goods and Services Tax (GST).

According to SIAM, the passenger vehicles category (which includes cars, utility vehicles and vans) saw sales grow by 2.76 per cent at 2.08 lakh units.

However, even as people are buying more cars, according to numbers released by the industry body, commercial vehicles sales continued to fall, declining by about 15 per cent to 46,986 units from 55,458 units in the same period in the previous year.

“Commercial vehicles sales are still in the negative. There is some improvement in the sense that the decline earlier was 25 per cent now it’s 15 per cent. But again too early to say if it’s a trend,” he added.

Total two-wheeler sales during the month grew by 16.3 per cent to 14.03 lakh units from 12.06 lakh units in the year-ago month.

While motorcycle sales were up 11.71 per cent at 9.84 lakh units, scooter sales rose 34.48 per cent to 3.58 lakh units in May.

Meanwhile, Mr. Mathur added that weak monsoon could have a negative impact on the sector, particularly of two-wheelers and small cars, which get good demand from rural areas.

“In case of poor monsoon usually two-wheeler and small car demand from rural markets can get affected,” he added.

Total sales of vehicles across categories registered a growth of 13.22 per cent at 16.98 lakh units against 14.99 lakh units in the same month a year ago.

More In: Business | Industry