It's not just the Indian economy that is in a sweet spot in the global order, but even the automotive market, which despite all the quirky issues pulling it down, has managed to post record sales and has a very positive outlook for the ongoing fiscal year.
As per the data released by the apex body of Indian automakers, Society of Indian Automobile Manufacturers (SIAM), sales of passenger cars increased by 7.87 per cent to 2.025 million units last year, a new high for the segment.
The spate of new sports utility vehicles or SUVs like Hyundai Creta and Maruti Vitara Brezza hitting the market boosted demand with an all-time high sales of 586,000 units for the March ended fiscal year.
Also, scooters that have been silver lining for the two-wheeler market for almost a decade, hit the zenith at 5.031 million units retailed to customers last year.
As a sign of recovery of the economy, the demand for heavy commercial vehicles rose 30 per cent to 302,000 units in last fiscal, which was the highest growth posted by any single segment.
Sharing the future outlook, Sugato Sen, SIAM's Deputy Director General, said that the passenger vehicles segment including SUVs is likely to grow in the 6-8 per cent range till March 2017. "The automobile industry is still in a slow recovery phase. Despite sluggish demand and the freshly imposed infrastructure cess in the budget, we are expecting a steady growth in car sales as high incomes from next pay commission along with improved consumer sentiments and the new launches will propel the market in the new fiscal."
The auto industry has been facing huge hurdles in the past few months. Besides, court interventions had further complicated matters. Supreme Court has banned registration of all cars over 2,000 cc of engine size in Delhi. Cars in India are the highest tax item among manufactured products. There has been no initiative from the government to support the industry, and now the international players are raising questions over the viability of their investments.
Despite the hiccups, various companies also posted best fiscal sales. Mercedes-Benz India clocked its highest ever sales in the Indian market selling 13,558 units between April 2015 and March 2016, a 21 per cent growth over the previous year.
Roland Folger, Managing Director and CEO, Mercedes-Benz India, commented "It is a significant achievement for us, as we have maintained our growth momentum in the 2016 fiscal, despite facing multiple market challenges. We have been able to compensate the negative sales impact in the Delhi and NCR market, with a strong double-digit growth achieved in most other markets across the country. This strongly underlines the fact that luxury car buyers increasingly prefer Mercedes-Benz."
The mass market players also performed a similar feat. The leader, Maruti Suzuki ended the 2015/16 fiscal with its highest ever sales of 1,429,248 units, a growth of 10.6 per cent. This comprises highest ever domestic sales of 1,305,351 units and 123,897 units of exports. On the same beat, South Korean carmaker, Hyundai Motor India, which is also the largest car exporter from India, posted its highest-ever domestic sales of 484,324 in 2015/16.
The other company that remained high on the sales graph was Renault, which posted a 65 per cent rise in sales to 71,732 units on the back of strong demand for its newly launched Kwid hatchback.
Amid good sales for the industry, the rising incidence of taxes on cars and concerns around diesel vehicles that could affect demand in the fiscal remain the focal point.
The growth is not widespread - many companies like Fiat, Nissan, Skoda, Volkswagen, Bharat Benz, General Motors and Tata Motors' passenger car division are struggle to operate their production capacity in the absence of any demand for their products.