New Delhi: Sales of passenger vehicles (PVs) in India grew at the sharpest pace in 42 months in September to 278,428 units, up 19.92% over the year-ago period.
In March 2012, sales of PVs grew 21.37% to 233,151 units, according to data provided by industry lobby Society of Indian Automobile Manufacturers or Siam.
Sales of two-wheelers grew 21.59% over the year-ago period to 1.86 million during the month and Siam expects the segment to grow at the same rate during the year.
Auto makers continued to attract sales with special editions and new variants. A good monsoon and wage hikes for government employees are expected to fuel consumption in the festival season starting October, which will see Navratra, Dussehra and Diwali. Last year, Diwali was celebrated in November.
“The industry is geared up for the festive season. The outlook is overall positive,” said Sugato Sen, deputy director general at Siam.
Siam attributed the growth to the distribution of monsoon this season, which has been the best in the last three years, with only one-third of the districts seeing a deficiency, compared with almost half in fiscal year 2015 and 46% in fiscal year 2014.
The increase in demand for automobiles in the country has prompted Siam to revise its growth projections in August. The lobby group now expects the passenger vehicle industry to grow in the range of 11-13% in fiscal year 2017, as against an earlier forecast of 6-8%.
Good rainfall is expected to boost farm output and improve demand for goods, ranging from motorcycles to smartphones and tractors. Improved rural consumption will increase the gross domestic product by as much as a percentage point in the fastest-growing major economy in the world, according to estimates by CLSA Asia-Pacific Markets.
Demand in the commercial vehicle segment tapered off due to multiple factors, said Vishnu Mathur, director general, Siam.
“Apart from any real activity in the core sector, there are two factors, which have impacted sales in the commercial vehicle segment. First, expectation of GST roll out to impact pricing favourably. Second, BS IV emission norms will increase the prices,” Mathur said.Sales of commercial vehicles declined 1.95% to 61,621 units.
India’s economy grew 7.6% in 2015-16 and the Narendra Modi government expects it to grow close to 8% in 2016-17. The International Monetary Fund (IMF) on Tuesday raised it by a tad, citing the resilience of its economy and robust growth momentum.
The IMF now expects the economy, Asia’s third largest, to expand 7.6% in 2016-17, up from its earlier projection of 7.4%.
According to Abdul Majeed, partner and national auto practice leader, PricewaterhouseCoopers, growth will be robust for all the segments in 2016-17.
“Inflation is under control due to the steps taken to reduce supply side constraints. One segment where we have seen degrowth is the medium and heavy commercial vehicles which will grow once private investments speed up in the economy,” Majeed said.
First Published: Fri, Oct 07 2016. 01 09 PM IST