The passenger vehicle segment, which has faced some pressure in domestic sales in the past few months, is likely to witness some cheer in the coming months, as sales are expected to pick up with new launches as well as softer fuel prices.
The new launches are already rolling out, beginning with the Volkswagen Vento and Honda Jazz, and are likely to boost the market further with the upcoming Hyundai Creta and Maruti Suzuki S-Cross. Maruti Suzuki has initiated pre-bookings for the S-Cross, while Hyundai has announced getting over 10,000 pre-bookings for its compact SUV, Creta.
The consumer sentiment, which is highly sensitive to price fluctuations, will get a boost as fuel prices are expected to continue to be low on the back of the Iran nuclear deal and stability in the Eurozone, analysts said.
“The major factors that will have a positive impact on the passenger vehicles market is the good number of new launches in the festive season and the fact that fuel prices are at the best possible point for India,” said Rajeev Singh, head, automotive, at KPMG.
However, pressure would continue to exist on the entry-level mini passenger cars segment as interest rates are still high, analysts said.
In the April-June period in the current financial year, passenger vehicles sales recorded a growth of 6.17%. This slow growth was due to the contraction in the high-volume entry-level segment, in which growth shrunk to 5.4% to 1,23,058 units in April-June, from 1,30,071 units in the corresponding period of 2014-15. The entry-level segment is dominated by Maruti Suzuki, with its Alto and WagonR, and the company saw a steep fall of 28% in the segment in June and growth of a mere 2% in the April-June period.
However, the remainder part of the financial year, especially the festive season, promises a host of launches in all the segments.
Most companies, including Maruti Suzuki, Honda, Hyundai, Renault, Ford and Tata Motors have announced new models in the coming days.