Cars sales speed up, bikes skid - The Financial Express

Cars sales speed up, bikes skid

Passenger vehicle sales in December grew in double digits for the third month in a row, posting the highest ever volumes in December ever, reports fe Bureau in New Delhi.

By: | Updated: March 19, 2016 7:40 PM

Passenger vehicle sales in December grew in double digits for the third month in a row, posting the highest ever volumes in December ever, reports fe Bureau in New Delhi. SIAM data show, however, that two-wheeler sales were disappointing, dragged down by motorcycle sales into negative territory.

While passenger vehicles posted a growth of 10.45%, which mainly came on the back of heavy discounts by automakers in December combined with a slew of new launches in the previous months, two-wheeler sales shrank 3.1% with motorcycle sales contracting 5.93%. “December is always a difficult month for us. But this time, I think the inducement from the car manufacturers in terms of discounts to a large extent has helped in sales growth during the month,” SIAM deputy director general Sugato Sen said, adding that motorcycle sales continue to be a cause of concern. The passenger car segment saw stronger growth of 12.87%, which was the 14th consecutive month of growth for the segment.

In two-wheelers, motorcycle sales saw a contraction for the ninth time in the calendar year 2015 and the sixth time in the first nine months of the fiscal 2015-16.

The slowdown in the motorcycle market has been consistent for the past many months mainly due to low demand from the rural markets, which comprise close to half of total motorcycle sales. Hero MotoCorp, which dominates the motorcycle market with a share of 41%, also saw a decline of 6.04% in December, which was its fourth month of decline since April.

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Moreover, scooters, which have seen strong double-digit growth in domestic sales for many months in the past couple of years, also witnessed slow growth of 3.12% in December. This was the second consecutive month for scooters to record a sub-5% growth. Honda Motorcycle and Scooter India, which controls 51% of the scooter market in India, has witnessed two consecutive months of declining scooter sales. However, Hero MotoCorp, which launched two new scooters in September-October last year, saw its share jump from 13% in September to 21% in December.

With the trend of strong volumes continuing, Siam is now expecting double-digit growth for passenger vehicle sales in the current financial year. “Although we don't give future guidance, but looking at the current situation we expect to grow better than 6-8%. I think we should be crossing 10%,” Sen said. In the April-December period, passenger vehicle sales have grown 9.05%, with a growth of 11.54% in passenger cars and 3.17% in utility vehicle sales.

Among commercial vehicles, medium and heavy commercial vehicles continued strong growth of 19.34%, while light commercial vehicles sales grew 5.57% compared to year-ago levels.

Renault overtakes Tata Motors in PV domestic sales: With the launch of entry-level hatchback Kwid in September, Renault India has strengthened its position in the domestic passenger car market. Not only has the French carmaker has gained significant market share (4.46% in December versus 0.77% in September) since the car's launch, it surpassed home-grown Tata Motors in passenger vehicle sales in December last year. While, Renault sold 10,292 units of passenger vehicles, close to 6,900 of which were of the Kwid, Tata Motors managed to sell only 9,635 units.

However, the lead for the French carmaker may not last long as Tata Motors is expected to launch its new hatchback Zica in the mass-market segment competing with the likes of Maruti Suzuki's Celerio. In India, Renault shares a manufacturing facility having a capacity to produce 400,000 cars a year with Nissan, which will limit Renault's ability to cater to the demand if it continues at a similar pace, analysts say.

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