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The Society of Indian Automobile Manufacturers (SIAM) has revised its growth estimate to 10-12 per cent in the current financial year from 6-8 per cent earlier on the back of signs of positive momentum in sales growth, especially as the festival season approaches.
“Originally, we had estimated the sales growth of passenger vehicles (PVs) to be 11-13 per cent, which was later revised downward to 6-8 per cent. Looking at what is happening and after speaking to our members, it is now felt that growth will be higher. We should be hitting around 10-12 per cent,” Sugato Sen, Deputy Director General, SIAM, said here on Thursday.
Passenger vehicle sales grew by 11 per cent to more than 12.15 lakh units during April-August in the domestic market, against around 10.98 lakh units in the corresponding period last year.
The demand for PVs has been driven by new models, especially in the SUV/ UV category, with Maruti Vitara Brezza, Hyundai Creta and Mahindra KUV100, TUV300 clocking good sales.
With the upcoming festival season, the overall sales of automobiles, including two-wheelers and passenger cars, are expected to grow, SIAM said.
Meanwhile, domestic PV sales grew for the 14th straight month in August at around 17 per cent, to more than 2.58 lakh units (versus 2.21 lakh units in August 2015). Passenger car sales were also up more than 9 per cent to around 1.782 lakh units, against 1.62 lakh units in August last year.
The revival in sales has become stronger because of a good monsoon coupled with the 7th Pay Commission, leading to positive consumer sentiments, the industry body said.
The two-wheeler market also achieved sales of over 10 lakh units in August after a couple of months of decline, as rural demand has revived. According to the latest SIAM report, the two-wheelers segment achieved sales of around 16.49 lakh units in August, up 26 per cent, against 13.05 lakh units in August 2015.
Overall, the auto industry sees pent up demand, except for medium/heavy commercial vehicles as there is still some uncertainty among fleet owners with regard to the overall impact once the Goods and Services Tax (GST) comes into force.
“This segment will remain under pressure till we see overall sustainable development across different segments in the economy, as well as once it becomes clear how GST will impact freight movement and demand after its implementation,” said Abdul Majeed, Partner at PriceWaterhouse.
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