Sales of passenger vehicles in the country increased by more than 14% in January, reviving hopes of a double-digit growth for the automobile industry in the current financial year.
Two-wheeler sales, however, continued to fall, pulling down the total automobile sales across categories. The overall automobile sales declined 4.71% to 16,20,045 units last month against 17,00,141 units in January 2016.
In December 2016, sales had touched a 16-year-low at 12,21,929 units, declining 18.66%.
“Most of the sectors have shown improvement last month. Sales growth in passenger vehicles has been encouraging. It seems that the impact of demonetisation is waning off,” Society of Indian Automobile Manufacturers (SIAM) Director-General Vishnu Mathur said.
According to data released by the industry body on Thursday, passenger vehicle sales, which includes cars, utility vehicles and vans, stood at 2,65,320 units last month compared with 2,31,917 units a year earlier.
While car sales were up 10.83% to 1,86,523 units, sales of utility vehicles rose 24.47% to 62,264 units.
“In April-January, we have seen a growth of 9.17% in passenger vehicle sales. Keeping January sales in mind and hoping that next two months would also be good, we are now expecting close to double-digit growth in the fiscal,” Mr. Mathur said.
Two-wheeler sales were down 7.39 per cent at 12,62,141 units. While sales of scooters fell by 14.50% to 3,73,382 units, motorcycle sales dipped by 6% to 8,19,386 units.
Mr Mathur said it will take some more time for the segment to fully recover.
Sales of commercial vehicles were down marginally at 61,239 units in January.
Commenting on the data, Abdul Majeed, Partner - Price Waterhouse, said, “Some of the OEM’s who have launched new vehicles, who are having the waiting period have done well, resulting in an increase of primary dispatch to dealers. However, the two wheeler and commercial vehicles segment has reduced growth due to the impact of demonetisation, especially in the rural markets.”
He added that the customers are cautious with their spending because of the uncertainties pertaining to the growth of the economy as well as the implementation of GST, where tax rates are undecided.
“This quarter will be challenging for the overall growth of the automotive industry, but is expected to pick up in Q3 2017,” he added.
