Domestic car sales up 6% in Aug; bikes down 9.59%

Automobile sales in August continued to show mixed trends with patchy growth — car manufacturers posted modest growth of 6.06% largely on the back of new launches...

By: | Updated: March 21, 2016 12:23 PM

Automobile sales in August continued to show mixed trends with patchy growth — car manufacturers posted modest growth of 6.06% largely on the back of new launches while bike manufacturers reeled under weak rural economy, thus posting a decline of 9.6%, according to data from Society of Indian Automobile Manufacturers on Thursday.

With the onset of the festival season, the industry is expecting sales to pick up and projections are that this time sales will be better than the last two years.

"We are on slow and steady but not very explosive growth path. This is the 10th consecutive month of increase in car sales," Siam director general Vishnu Mathur told reporters, adding that demand for motorcycles has suffered due to a slowdown in the rural economy. “It is a real area of concern as decline in motorcycle sales has brought down the overall vehicles sales," Mathur said.

During the month, market leader Maruti Suzuki posted a growth of 4.38% in domestic passenger car sales while Hyundai Motor India saw passenger car sales decline by 1.8%.

Honda Cars India's sales were up 31.56%, mainly on the back of the launch of the premium hatchback Jazz. Tata Motors too witnessed growth of 19% in domestic passenger car sales. The overall passenger car segment saw the 10th consecutive month of growth in domestic sales.

Analysts said the market response has been a mixed one till now. “Growth is not uniform across brands, or segments or models. Overall, the market has been mixed,” Rakesh Batra, partner and national leader, automotive sector, EY.

“The large part of growth is coming from new launches, if that is taken out, the picture again changes,” Batra said.

"Out of 17 players in the passenger vehicles segment, 9 witnessed growth in August. Gradually growth may become even broad-based," Siam DG Mathur said, adding that a cut in interest rates could help boost demand.

Gr1

At the same time, utility vehicles posted a contraction in domestic volumes despite launches in the segment by market leaders like Maruti Suzuki and Hyundai Motor India. Mahindra & Mahindra, which dominates the utility vehicle segment, saw sales decline by 4.34% to 13,307 units as against 13,911 in August last year.

Two-wheelers too posted a mixed picture as scooter sales grew 15.7% while motorcycle sales contracted 9.6%. In fact, motorcyles and light commercial vehicle segments performance pulled down the entire industry's growth to (-)2.07% in August.

In the motorcycle category, market leader Hero MotoCorp saw bike sales decline 15.5 %, while rival Honda Motorcycle and Scooter India saw a contraction of 17.5%. Scooter sales were up 15.66 % in August, with Honda recording a growth of 13.3% and TVS Motor posting 6.2% growth.

In the commercial vehicle space, medium and heavy commercial vehicles continued to register robust growth at 35.4%. However, light commercial vehicles saw a fall of 7.4% in August.

Analysts, however, remain hopeful from the festive season that will kick-in by end September. “Sales will be driven by low inflation and low cost of ownership, relative to last year,” Kumar Kandaswami, senior director, Deloitte in India, said.

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