Passenger Vehicle sales surge in India as demonetisation impact diminishes

Signalling a drive towards recovery with the impact of demonetisation waning off, passenger vehicle (PV) sales in India rose by 14 per cent in January reviving hopes of the automobile industry to achieve double-digit growth this fiscal.

However, with two-wheeler sales still continuing to be in the negative zone, the overall sales across categories registered a decline of 4.71 per cent to 16,20,045 units from 17,00,141 units in January 2016.

In December 2016, the overall automobile sales growth had touched a 16-year-low at 12,21,929 units, down 18.66 per cent, from 15,02,314 units in December 2015.

According to Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales last month were at 2,65,320 units, as against 2,31,917 in January last year.

Domestic car sales also ticked up to 1,86,523 units as against 1,68,303 in January last year, up 10.83 per cent, SIAM said.

“Most of the sectors have shown improvement last month.  Sales growth in passenger vehicles has been encouraging. It seems that the impact of demonetisation is waning off,” SIAM Director General Vishnu Mathur told reporters here.

Car sales have also witnessed robust growth even in rural areas, he added.

“In the April-January period we have seen a growth of 9.17 per cent in passenger vehicle sales. Keeping January sales in mind and hoping that next two months would also be good, we are now expecting close to double digit growth in the fiscal,” Mathur said.

During January, market leader Maruti Suzuki India saw its car sales rise by 17.68 per cent to 1,03,276 units as against 87,757 in the same month last year. The company’s utility vehicle sales jumped 101.04 per cent to 16,313 units as against 8,114 in November last year.

Rival Hyundai Motor India reported a increase of 8.12 per cent in its domestic car sales at 33,949 units compared with 31,398 units in the year-ago period. Its utility vehicles sales came in at 8,068 units as against 6,618 last year, up 21.9 per cent.

Utility vehicle major Mahindra and Mahindra saw its sales in the utility category decline 8.63 per cent to 19,217 units last month as against 21,034 in the year-ago month. Its car sales were at 339 units compared with 293 last year, up 15.69 per cent, as per the SIAM data.

Commenting on two-wheeler segment, Mathur said it will take some more time for the segment to fully recover from the demonetisation blues.

“Motorcycle sales were down 22 per cent in December. In January it is down 6 per cent. So the sales are increasing but owing to segment’s large base it will take some time to fully recover,” Mathur said.