Car sales grow 1.53% in June, slowest in five months

Car sales have been slowly picking up over the past few months with improvement in consumer sentiment, but the growth rate in June was slowest since January this year when sales grew just 3.14 percent.

hidden July 09, 2015 18:03:05 IST
 Car sales grow 1.53% in June, slowest in five months

New Delhi: Car sales in India grew 1.53 percent in June, the slowest in five months, with industry body SIAM singling out annual plant maintenance shutdowns putting the brakes on growth.

The maintenance work at top auto makers such as Maruti Suzuki India and Toyota Kirloskar Motor is seen to have slowed the overall pace.

 Car sales grow 153 in June slowest in five months

Representational image. AFP

The motorcycle segment, which has been reeling under a slump due to poor rural demand, inched marginally towards the positive territory for the first time in eight months.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in June this year stood at 1,62,677 units against 1,60,232 in the year-ago month.

"The low growth of passenger cars was due to annual maintenance closure of companies like Maruti and Toyota falling together during the last month," SIAM director general Vishnu Mathur told reporters in New Delhi.

Car sales have been slowly picking up over the past few months with improvement in consumer sentiment, but the growth rate in June was slowest since January this year when sales grew just 3.14 percent.

Industry players have pointed out that there has been a slowdown from April to June this year as negative sentiment in the run-up to monsoon and postponement of purchases by customers waiting for lower interest rates affected demand.

Mathur said overall passenger vehicles sales were impacted during the month due to negative performance of vans and utility vehicles.

Total passenger vehicles were down 0.54 percent in June at 2,17,642 units, from 2,18,828 during the year-ago period.

Motorcycle sales last month rose marginally to 8,77,696 units, from 8,77,289 a year earlier.

"The motorcycle segment is still facing pressure from slowdown in rural areas. Last month, however, the sales have grown marginally," Mathur said.

The last time motorcycles sales were in the positive territory was in September 2014 when it grew 19.34 percent.

Total two-wheeler sales in June rose 3.55 percent to 13,07,710 units.

On the commercial vehicle segment, SIAM deputy director general Sugato Sen said: "There was a mixed kind of performance in the commercial vehicle segment last month. While M&HCV segment did quite well, LCVs continued to remain in the negative."

The mixed performance of medium and heavy commercial vehicle (M&HCV) and light commercial vehicle (LCV) segments led to a marginal jump in total commercial vehicles in June, he said.

Sales of commercial vehicles rose marginally to 51,446 units in June.

Sales of passenger cars during the first quarter of FY16 rose 8.57 percent to 4,82,332 units compared with 4,44,242 units in the same period of 2014-15.

However, motorcycle sales declined 1.97 percent to 27,12,769 units during the first quarter from 27,67,408 units in the same period previous fiscal.

Total commercial vehicle sales rose 3.55 percent to 1,46,159 units in first quarter compared to 1,41,145 units in the same period of 2014-15.

Commenting on the outlook for the passenger vehicle segment in the rest of 2015-16 fiscal, Sen said that new launches in the UV and SUV segment are "expected to help the segment grow marginally during the fiscal".

He added that commercial vehicle and motorcycle sales would see some revival during the second half of the fiscal.

On exports, Sen said withdrawal of export incentives have impacted the overseas dispatches, particularly to Sri Lanka and Bangladesh.

In June, market leader Maruti Suzuki India saw its sales grow marginally to 86,630 units as against 86,223 units in the year-ago period.

Likewise, Hyundai Motor India posted a growth of 3.86 percent at 34,542 units compared with 33,258 units in June last year.

Honda Cars India sales rose 6.34 percent at 17,280 units against 16,236 units a year ago.

In the case of Tata Motors, sales rose 43.53 percent to 8,516 units against 5,933 units in the same month last year while those of Mahindra & Mahindra slipped 12.48 percent at 14,433 units compared with 16,492 units last year.

During the month, motorcycle market leader Hero MotoCorp sales rose marginally to 4,73,518 units as against 4,71,548 units in June last year.

Rival Bajaj Auto saw its bike sales rise by 4.67 percent to 1,54,596 units compared with 1,47,690 units in the corresponding month last year, while that of Honda Motorcycle and Scooter India (HMSI) declined by 21.46 percent to 1,12,139 units as against 1,42,793 units in June 2014.

According to SIAM, scooter sales in June this year grew by 14.21 percent at 3,70,710 units as against 3,24,574 units in the same month last year.

Scooter market leader HMSI posted a growth of 31.88 percent in June at 2,19,720 units as against 1,66,594 units in the same month last year.

Hero MotoCorp, however, saw its scooters sales decline by 29.23 percent at 41,761 units compared with 59,012 units in the same month last year. Chennai-based TVS Motor posted scooter sales of 57,744 units as against 56,396 units in the same month last year, up 2.39 percent.

In June, total vehicle sales across categories registered a rise of 2.56 per cent to 16,20,673 units, from 15,80,173 units in June 2014, SIAM said.

Commenting on June car sales, Price Waterhouse Partner and auto expert, Abdul Majeed said: "We are not able to see sustained demand in the automotive sector during this year mainly due to lack of significant growth in the Indian economy."

The major challenge for automakers is subdued demand in the rural economy mainly on account of sub optimal monsoon which is especially impacting few segments like small cars, small commercial vehicles and motorcycles, he added.

Also, interest rates are still very high, liquidity remains a challenge and there is now growing concern on rising inflation, Majeed said.

"The only hope is on the new launches which will attract customers to showrooms during the festive season in third quarter," he added.

PTI

Updated Date:

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