Auto sector gearing up for better sales this festival season

Our Bureau New Delhi | Updated on January 16, 2018 Published on October 07, 2016


Concerns over medium and heavy commercial vehicles remain

September saw the domestic automobile industry registering one of the fastest growths with sales in categories such as passenger cars and two-wheelers increasing multi-fold.

Besides, with the festival season on, the industry is expecting to better this performance. According to the auto industry body Society of Indian Automobile Manufacturers (SIAM) and analysts, the festival season this year will be better than previous years.

“The industry is geared up for the festival season. We expect it to be better than previous years,” Vishnu Mathur, Director-General, SIAM, said on Friday. The only concern they have is of the medium and heavy commercial vehicles (M&HCV), the only segment which is still in the negative zone.

“Very strong positive growths in medium and heavy segments have now turned to negative. It is a worry area. Although activity in core sectors like mining has begun, but the actual action on ground is yet to take off,” Mathur said.

However, according to Rakesh Batra, Partner and sector leader – Automotive at EY India, the segment is expected to witness some respite in the second half of the year supported by increase in pre-buying ahead of BS IV implementation, pick up in post-monsoon construction and mining activity, and other related industries.

“The segment is likely to witness growth, helped by recovery in rural demand, favourable freight rates, strengthening financing environment, pre-buying ahead of BS IV implementation, pick-up in consumption-driven sectors and some replacement-led demand,” he said.

According to the SIAM’s latest monthly sales report, the M&HCVs’ sales dropped by more than 20 per cent to 24,748 units in September as compared with 31,174 units in September last year.

Meanwhile, the passenger car segment reached almost two-million units (20 lakh units) mark in September year-on-year, the latest report by SIAM said.

The passenger cars segment reached a total of more than 1.95 lakh units during September, up more than 15 per cent, as compared with around 1.69 lakh units in the corresponding month last year.

This has led to the growth of total passenger vehicles to more than 2.78 lakh units during last month, a 20 per cent jump from around 2.32 lakh units in September 2015.

The two-wheeler sector also reported more than 21 per cent growth to around 18.69 lakh units in September against 15.37 lakh units in corresponding month last year.

“The growth will be robust this year across all the segments. This is due to the combination of many positive factors such as growth in the economy, better cash flows in the hands of customers, exciting new launches, softening in the interest rate and better monsoon.” said Abdul Majeed, Partner at Price Waterhouse.

Published on October 07, 2016
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