Auto body hopes SUVs will drive vehicle sales

Our Bureau New Delhi | Updated on July 10, 2012


Ups target for passenger vehicles, lowers growth for cars, three-wheelers

The flurry of launches in the sports utility vehicles segment is expected to drive growth in the automobile sector this fiscal, vehicle manufacturers body Society of Indian Automobile Manufacturers (SIAM) has said.

It raised the passenger vehicles (PV) growth target by a percentage point to 11-13 per cent, from its April projection of a 10-12 per cent sales rise.

This revision comes as a surprise as auto sales have been challenging this year, posting a moderate growth since April on depressed market sentiments.

Diesel-dominated utility vehicles (UVs) are expected to boost the overall PV sector on a strong 29-31 per cent rise (from 10-12 per cent previous growth projection).

In contrast, car sales growth has been downgraded by a percentage point to 9-11 per cent – largely on falling demand for petrol vehicles.

“The revision is based on our econometric model. We see a positive sentiment on the back of dropping petrol prices, an expected lowering of interest rates and a plethora of new models being launched at very competitive prices,” said Mr S. Sandilya, President of SIAM.

In the first quarter ended June, PV sales have grown 10 per cent boosted by a 51 per cent rise in UV sales.

Car sales in the first three months have gone up five per cent.

The growth projection for total auto sales has also been increased by a percentage to a similar 11-13 per cent rise.

The auto body expects three-wheeler (0-2 per cent) and commercial vehicle (six-eight per cent) segments to both record a lower growth than its previous projections.

However, depending on proper monsoons, two-wheeler sales are expected to maintain the previously announced target of 11-13 per cent growth.

“Bus sales are up mostly for tourism and school bus demand. Implementation of the second JNNURM scheme should help boost demand,” Mr Sandilya said.

June Sales

Total domestic auto sales last month were up nine per cent, though total exports fell nine per cent on slow overseas demand for two and three-wheelers.

PV sales in June were up 11 per cent.

This was led by market leader Maruti Suzuki’s 19 per cent growth attributed to strong demand for diesel models and the low base of June last year when it lost production for half a month due to strike at its Manesar plant.

Hyundai’s sales were flat, while Tata Motors saw a 14 per cent dip on slow demand for the Indica and Indigo range.

Mahindra & Mahindra, which mostly had diesel-powered UV models such as the Scorpio and Bolero, saw sales going up 26 per cent.

CV sales growth in the month was slower at five per cent, even as three-wheeler sales rose four per cent.

Meanwhile, two-wheeler sales were up nine per cent, with Hero MotoCorp posting a four per cent rise,

Honda 57 per cent and Bajaj Auto growing by one per cent.

Published on July 10, 2012

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