Industry

Car sales set to register 3-5 % growth this fiscal: SIAM

Car sales grew by over three per cent in January. The growth is mainly attributed to interest rates cuts and declining fuel prices, which offset the impact of withdrawal of excise duty sops.

January sales

According to the latest data released by the Society of Indian Automobile Manufacturers (SIAM), car sales increased by 3.14 per cent to 1.69 lakh units in January from 1.64 lakh units in the year-ago month.

“The 3-5 per cent growth rate is realistic in view of the current economic situation. December sales were an aberration due to the excise duty cut coming into play from January,” SIAM Director-General Vishnu Mathur said.

In December, car sales had surged over 15 per cent on the back of advance purchases by customers due to imminent increase in vehicle prices following expiry of excise duty concessions.

Price discounts offered by car makers to clear year-end stocks also supported demand in December.

Pointing out that de-growth in annual sales is not likely, Mr. Mathur said the industry was expected to grow in the range of 3-5 per cent this fiscal.

Amit Kaushik, Principal Analyst (Automobile) at consultancy firm IHS Automotive, said that while the January number looked good, sales were expected to be ‘shaky’ in February as some buyers were likely to hold back purchase decisions on hopes of some tax relief in the Budget 2015.

While two-wheeler sales in January rose by 1.07 per cent to 13.28 lakh units, motorcycle sales declined by 5.85 per cent to 8.69 lakh units due to weakening rural demand.

“Urban demand is shifting towards scooters. Besides, rural income has been impacted due to several reasons, including less rainfall. All these factors have impacted motorcycle sales,” Mr. Mathur said.

Total scooter sales went up by 25 per cent to 4.05 lakh units in January from 3.23 lakh units in the same month last year. Sale of commercial vehicles, an indicator of economic activity in the country, rose by 5.30 per cent to 52,481 units.

“Sales of heavy commercial vehicles have shown improvement as people have started buying new vehicles. There was a vacuum in the system for the last three years, and people were now buying new vehicles. Now they have started replacing their old vehicles with new ones,” Mr. Mathur explained.

As per SIAM numbers, total vehicle sales across categories registered an increase of 1.66 per cent at 16.50 lakh units in January against 16.23 lakh units in same month last year.

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Printable version | Dec 1, 2020 5:02:57 AM | https://www.thehindu.com/business/Industry/car-sales-set-to-register-35-growth-this-fiscal-siam/article6879225.ece

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