Passenger vehicles sales up 16 per cent in April

Analysts expect the growth to continue with car makers launching more new products in the coming months

By: | Published: May 3, 2016 5:36 AM

Passenger vehicle sales made a strong headstart in the first month of the new fiscal year, with double-digit growth, that came in mainly on high volumes for models launched in the past few months. Maruti Suzuki, Hyundai, Renault and M&M showed strong year-on-year growth indicating high demand for the new models like Baleno, Brezza, Kwid and Creta. For the top-five players in the domestic market according to April sales, the growth in domestic sales has been 16% year-on-year, which is highest in the last six months. Two-wheelers also posted strong volumes with major players like Hero MotoCorp, Honda and TVS Motor showing double-digit growth.

Analysts are expecting the growth to continue with car-makers launching more new products in the coming months.

Honda cars, for instance, is scheduled to launch its sports utility vehicle B-RV later this week and Datsun has also announced that it will be launching the hatchback redi-Go in June. “The passenger car growth is significant, even though the signs suggesting this growth were evident for the past few months. That said, the pattern of sales growth dominated by successful new launches seems to continue,” Kumar Kandaswami, senior director at Deloitte in India said.

Maruti's growth came in mainly from high volumes for its premium hatchback Baleno which sold around 9,500 units in April while the compact sports utility vehicle Vitara Brezza sold 7,800 units.

Sales in the utility vehicle segment for Maruti, which also includes Ertiga and S-Cross jumped 260% year-on-year in April. However, in the entry level mini-segment, Maruti opened the year with a decline of 10% in volumes.

This segment accounts for one-third of Maruti's volume and includes popular models like the Alto and WagonR. The entry-level segment has in the past few months seen French car-maker Renault register strong volume with the high-demand for its hatchback Kwid. For Maruti, the mini segment has seen a fall in sales in each month since January.

On the two-wheeler front, sales appear to be picking up with market leaders Hero MotoCorp and Honda Motorcycle and Scooter both posting double-digit growth in April.

Motorcycle sales have been under pressure for over a year and showed flat growth in the entire year 2015-16. Most of the growth for the two wheeler market has been coming from the scooter segment which grew 12% in 2015-16.

In April, scooter market leader Honda saw its scooter sales grow 33%. Hero MotoCorp saw its sales growing in double digits for the third month in a row. In April it grew by 15%.

Among other players, while Royal Enfield continued strong growth of 42%, which comes mainly on a lower base and comparatively smaller volumes, Bajaj Auto saw motorcycle sales grow a mere 2%.

Analysts are expecting the sales to pick up further if the monsoon rains remain at the forecast levels as close to 50% of motorcycle sales in the country come from rural areas.

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