Passenger vehicle sales still a crawl

Up 3.8% in September; utility vehicles, vans drag volumes; passenger cars grow 10%

A series of launches and festive season did not help lift demand for passenger vehicles (cars, utility vehicles and vans) in September. Sales by companies to their dealers grew only 3.8 per cent year-on-year, impacted by sharp decline in sales of utility vehicles and vans. Passenger cars, however, grew by an impressive 9.5 per cent, data released by the Society of Indian Automobile Manufacturers (Siam) showed. Eleven of 16 companies in the segment reported a decline and the growth was led by Maruti, Hyundai and Honda.

“The growth in Indian automotive industry this year so far has not been up to its potential. However, the festive season will be the key for automakers and, hopefully, customer sentiments should improve with many favourable factors such as low interest rates, low inflation, kick-start in government investment in infrastructure,” said Abdul Majeed, partner at Price Waterhouse and an automobile expert.

In the first six months of the financial year ended September 30, sales of passenger vehicles grew 6.2 per cent, even as utility vehicles and vans declined 2.6 and 1.5 per cent, respectively. According to Siam, there were 10 launches/re-launches in the July-September period such as Hyundai Creta, Maruti S Cross and Honda Jazz. Sugato Sen, deputy director-general, Siam, said the lowering of interest rates would help generate more demand for vehicles.

Sales of commercial vehicles grew 12 per cent in September. Mining has started reviving in various states and this has supported sales of commercial vehicles, especially in the medium and heavy segment. Within the segment, sales of medium and heavy commercial vehicles (M&HCVs) grew by 64 per cent in September as prices were set to increase from October due to mandatory fitment of anti-lock braking system and speed control device. Manufacturers increased prices by five-10 per cent and, as a result, many buyers advanced purchase to September. The light and commercial vehicles (LCVs) continue to decline and sales dropped by 14.5  per cent last month. M&HCVs grew 33.7 per cent in April-September period, while LCVs declined seven per cent.

 

Two-wheeler sales remained in the negative territory, declining one per cent in September.

Volkswagen case
The negative sentiment against diesel cars following the global cheating scandal by automobile major Volkswagen will not hit demand for diesel cars in India, Siam said.

It also said there is need to follow uniform emission standards across the country.

“I don't think so. Diesel is a clean and efficient fuel. It continues to be a popular fuel in many parts of the world," Vinod Dasari, Siam president and managing director of commercial vehicle maker Ashok Leyland said here when asked if the VW scandal would hit sales of diesel cars in India.

Dasari also highlighted the need to have one body that will deal with various regulatory issues related to automotive industry. “There is a requirement for having a single regulatory authority. It will be wonderful to have one body”, he said.

Adding the industry has to deal with various ministries such as Petroleum and Natural Gas, Heavy Industries and Road Transport for different matters, besides various state governments.

On the emission norms, he said India has adopted higher emission norms at a much faster pace issue than Europe. The auto industry is ready to adopt stricter standards provided fuel is available across India, he added. "If the fuel is available the auto industry can always consider options to move faster," he said when asked if the auto industry was ready to jump straight to BS VI from BS IV as is being suggested in some quarters.

He said there is a worry if the oil industry will be ready with BS V fuel for supply in 2019.