Auto industry body Society of Indian Automobile Manufacturers (SIAM) has made a modest upgrade in its 2014-15 growth outlook for the domestic passenger vehicle (PV) market on the back of improved consumer sentiments over the past few months. As opposed to its previous growth target of 1-2%, the association now expects PV sales to rise 3-5% this fiscal.
This confidence comes from the fact that with two more months to go for the fiscal, PV sales are already up 4% to 2.12 million units (April-January period).
“Unless something majorly goes wrong, I would expect 3-5% growth this year. We have increased our outlook because sentiments have improved on the back of expectation of lower interest rates and a drop in fuel prices. But nothing else has changed and these factors can only sustain about so much growth. For a sharper growth, we would need more changes like rationalization of taxes,” Vishnu Mathur, Director-General of SIAM told Business Standard.
Despite a 4-6% increase in excise duties coming into effect in January 2015, PV sales in the month were up over 3% to 230,619 units. This includes over 6% rise in utility vehicle volumes to 48,681 units and a 3% rise in car sales to 169,300 units. Market leader Maruti Suzuki posted 9% jump to 105,559 units, while rival Hyundai saw a 4% jump to 34,780 units. Honda saw almost 17% jump to 18,331 units, while homegrown player Tata Motors saw a 7% jump to 14,749 units. Mahindra & Mahindra, however, saw a 7% drop to 19,573 units. Incidentally, PV sales in December were also a major surprise, rising over 12% to 209,025 units.
Medium and heavy commercial vehicle sales made the strongest rebound in the month with a 37% growth to 21,363 units, while the overall commercial vehicle (CV) segment saw a 5% rise to 52,481 units on the back of a 9% drop in light CV sales to 31,118 units. Tata Motors saw 4% higher CV sales at 23,872 units, while Ashok Leyland saw 34.5% higher sales at 9,480 units.
“Truck sales are rising, but it must be seen with reference to an extremely low base. Motorcycle sales are negative because scooters have eaten into the market in urban areas, while rural demand is also down,” Mathur said.
Total two wheeler sales rose just 1% to 1.32 million units. Bike sales fell for the fourth consecutive month with an almost 6% drop in January to 868,507 units, though scooters maintained its strong growth trajectory with a 25% rise to 404,919 units. Hero MotoCorp saw over 1% drop in sales to 546,169 units, while Honda Motorcycle and Scooter India recorded 14% rise to 377,502 units. Bajaj Auto saw its monthly volumes drop 23% to 128,937 units.