Drought ends for carmakers as July sales pick up

Car sales in the domestic market showed positive numbers for the third consecutive month this financial year, led by positive sentiments.

The trend is expected to continue in the near future and the industry expects the year to close with 5-10 per cent growth in car sales.

Society of Indian Automobile Manufacturers (SIAM) figures show that car sales have been in the negative zone for the last two financial years. While it was -7.74 per cent in financial year 2012-13 (18.74 lakh units), it declined by -4.65 per cent in 2013-14 (17.87 lakh units).

“With a lot of new models lined up for launches ahead of the festive season, we are hoping that there will be at least single-digit growth this year. If the trend continues, we hope to end the year with a growth of anything between five and 10 per cent,” said Vishnu Mathur, Director-General, SIAM.

He said people are coming back to showrooms as the economy revives, and the industry body expects to see higher growth in the coming months.

For example, companies such as Hyundai Motor India and Tata Motors are launching new models, the Elite i20 and Zest sedan, respectively, which are expected to boost their sales in the festive season.

Led by new launches from the beginning of this year, the car segment grew 5 per cent in July (year-on-year) to 1.38 lakh units from 1.31 lakh units in the same month last year.

Two-wheeler sales grew 14 per cent to 12.87 lakh units in July as against 11.32 lakh units in July 2013, said SIAM.

While scooter sales grew 37 per cent to 3.72 lakh units during the month (versus 2.71 lakh units last July), motorcycle sales grew 6 per cent to 8.59 lakh units in July against 8.09 lakh units in July 2013.

“The demand for two-wheelers has increased during the last few months and we hope the numbers will continue to be in the positive zone in the coming months,” said Sugato Sen, Deputy Director-General, SIAM.

However, medium and heavy commercial-vehicle sales fell for the 29{+t}{+h} consecutive month, to 17,799 units, in July as against 18,611 units in the corresponding month last year.

According to analysts, for sustained growth, there has to see six months of growth in disposable income over inflation and the increase in the level of household savings, especially for passenger vehicles and two-wheelers.

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