Passenger vehicle sales show an uptick; Domestic manufacturers struggle

Passenger vehicle sales show an uptick; Domestic manufacturers struggle

Commercial vehicle sales continue to dip and registered its 19th consecutive month of decline in May

Passenger vehicle sales registered a 2.76 per cent increase during the month of May, with industry body Society of Indian Automobile Manufacturers (Siam) partly attributing the growth to the cut in excise duty on vehicles announced in February. Commercial vehicle sales, which are still in the negative, could take more time to rebound.

Domestic passenger car sales stood at 1,48,577 units during the month compared to 1,44,132 units sold in the corresponding period last year, registering a growth of 3.08 per cent. Maruti Suzuki, Hyundai, Honda Cars and Ford registered growth in volumes on the back of increased sales of new models, according to data released by Siam.

While sales for Maruti Suzuki went up by 16.37 per cent to 90,560 units, that of Hyundai Motor shot up by 12.78 per cent to 36,205 units. In contrast, homegrown auto majors Tata Motors and Mahindra & Mahindra (M&M), with no new vehicles in their portfolio, continued to witness sluggish demand. While sales of Tata Motors dipped by 29.54 per cent to 12,103 units, that of M&M decreased by 21.36 per cent to 19,470 units.

Even as the passenger vehicle segment witnessed growth, sales in the commercial vehicle category continued to dip and registered its 19th consecutive month of decline in May. Total sales of commercial vehicles (CVs) in May were down by 15.28 per cent to 46,986 units as compared with 55,458 units in the year-ago period.


The two-wheeler segment registered a sales growth of 16.3 per cent to 1,402,830 units from 1,206,173 units in the corresponding month of the previous year, while sales of motorcycle were up 11.71 per cent to 984,469 units as against 881,288 units sold in the year-ago period.

According to Siam, while buyers seem to be coming back to showrooms, a definite turnaround in vehicle sales may still be some time away. “Sentiments seem to have improved in the market. Enquiries are now converting into sales. Formation of a stable government at the Centre, coupled with reduction in cost of cars due to cut in excise duty, has brought back positive sentiments. We hope that the government will retain the current excise rate beyond June 30. Also, we are looking forward to the roll out of GST, environmental clearance for industrial projects to kick start the economy,” said Vishnu Mathur, director general, Siam.

In the interim Budget presented in February this year, former finance minister P Chidambaram had slashed excise duty to 8 per cent from 12 per cent for small cars, scooters, motorcycles and commercial vehicles; to 24 per cent from 30 per cent for SUVs; to 20 per cent from 24 per cent for mid-sized cars and to 24 per cent from 27 per cent for large cars.