New car launches, lower fuel prices and onset of the festive season brought some cheer to the passenger car industry in September, while utility vehicle segment remained in negative growth curve despite new model roll outs.
Medium and Heavy Commercial Vehicle (M&HCV) segment continued to maintain its strong growth, while LCV is awaiting recovery. In the two wheeler segment, bikes were in negative lane, while scooters continued their positive momentum.
Car sales were up 9.5 per cent at 169,590 units in September when compared with 154,898 units in September 2014, according to the statistics of Society of Indian Automobile Manufacturers’ Association (SIAM).
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However, new launches in the UV segment failed to lift the momentum as bigger SUVs were still seeing lower numbers. Only, compact SUVs were attracting buyers. UV sales were down about nine per cent at 48,564 units (53,003 units).
Improved infrastructure activities and buoyant replacement demand spurred demand in M&HCV segment. Goods category grew by 66 per cent at 27,490 units (16,512 units), while passenger segment recorded 46 per cent rise at 3,682 units (2,523 units).
In the LCV segment, passenger segment saw a rise of 15 per cent at 3,492 units, while goods category fell 17 per cent at 28,181 units.
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In two wheelers, poor rural demand pulled down the bike sales, while scooter stayed on its positive growth trajectory. Motorcycle sales were down about three per cent at 1,020,237 units (1050420 units), while scooter sales were up seven per cent at 462,341 units (433,955 units).
Total three wheelers’ sales were down by 13 per cent at 49,524 units (56,948 units).
For the half year ended September 30, 2015, the automotive industry has reported a fragmented recovery with only cars, M&HCVs and scooters showing growth, while others reporting decline. “The recent cut in interest rates and an expected pick-up in economic activity, coupled with new model launches and the upcoming festive season, are likely to drive growth in sales in the second half of this fiscal,” Rakesh Batra, Partner & National Leader - Automotive practice, EY India said.
PV market is expected to gather momentum during the second half, and close the fiscal year with a growth of 6-9 per cent, he added.
LCV sales are likely to witness a turnaround over the next few months, however, we expect the market to end this fiscal with slightly negative to flat sales growth. On the other hand, M&HCV sales are expected to continue to rise on the back of up tick in infrastructure investment. We, therefore, expect the overall CV segment to witness a sales rise of 7-10 per cent.
The two wheeler industry is likely to witness recovery in rural demand during the second half of FY16, with the approaching festive season, backed by the upcoming new model launches. The segment is expected to close FY16 with a growth of 1-3 per cent, pointed Mr.Batra.