Passenger vehicle sales on fast-track in April, but CV sales plunge on BS-III ban effect

Our Bureau New Delhi | Updated on January 11, 2018 Published on May 09, 2017

CV sales eps

Car sales at 18-month high; truck-makers Tata Motors, Ashok Leyland most hit

Hit by the BS-III ban from April 1, sales of medium and heavy commercial vehicles (M&HCVs) plunged 55 per cent during April to 10,602 units, compared with 23,515 units in the corresponding month last year.

The previous steepest fall was in 2008-09, the Society of Indian Automobile Manufacturers (SIAM), said on Tuesday.

Companies such as Tata Motors and Ashok Leyland were hit the most by the ban ordered by the Supreme Court in March-end.

“The decline in M&HCV segment was due to pre-buying following the Supreme Court’s announcement ending the sales of BS-III vehicles by March 31,” Sugato Sen, Deputy Director General, SIAM, said.

The ban led to a fall in total commercial vehicles sales to 41,490 units during the month, down 23 per cent year-on-year (YoY), against 53,835 units in April 2016.

According to a senior SIAM official, the auto industry would have to spend around ₹1 trillion for migration to BS-IV norms.

Meanwhile, sales of passenger vehicles in the domestic market grew 15 per cent to more than 2.77 lakh units during the first month of this fiscal, compared with 2.42 lakh units in April 2016.

Propelled by country’s largest passenger cars manufacturer Maruti Suzuki India, domestic car sales posted the biggest monthly sales in one-and-a-half years at around 1.91 lakh units, up 17 per cent from 1.63 lakh units in same month last year.

The previous highest growth in the segment was in October 2015 when sales grew 22 per cent, according to SIAM.

“Factors such as commissioning of new manufacturing plants, new model launches led to strong growth in the passenger vehicle segment during the month,” Sen said, adding that the segment saw a push mainly due to Maruti growing over 23 per cent during the month as supplies commenced from parent Suzuki's Gujarat plant leading the firm to also de-congest production at its other facilities as well.

“In the two-wheelers segment, scooters are doing pretty well. In fact, even in rural areas, people are increasingly going in for scooters,” Sen said. Motorcycle sales were up marginally at around 10.30 lakh units, against 10.25 lakh units a year earlier.

However, “the after-effects of demonetisation still remain. Besides, there has been a pre-buy in the months of February and March due to the coming into force of BS-IV emission norms from April,” Sen added.

Vehicle sales across categories registered an increase of 6.82 per cent to 20,30,476 units, from 19,00,848 units in April 2016.

Good start

According to analysts, this is a good start for the automotive industry, as many manufacturers have registered significant growth in April.

The pent-up demand is driving vehicle sales and the impact of demonetisation is wearing off.

“The year looks promising for the industry considering the overall growth in the Indian economy. However, there are a few challenges such as smooth implementation of the Goods and Services Tax and monsoon, which influence demand in the rural economy,” Abdul Majeed, Partner- PriceWaterhouse, and an auto expert, said.

Published on May 09, 2017
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