Sale of passenger cars and SUVs grew by nearly 20 percent during May 2018, at 301,238 units, raising hopes of a bumper year for the industry.
Passenger cars that comprises the majority of vehicle sales in the country grew by 19.64 percent at 199,479 units while utility vehicles grew at 17.53 percent during the month at 82,086 units. Sale of vans grew by 29.54 per cent at 19,673 units.
Industry body Society of Indian Automobile Manufacturers (SIAM) said the sales were largely propped by new model introductions in the last 2 months. Traditionally considered to be weak months, the first two months of this fiscal year have seen over a dozen new launches including new models and refreshes, a record. These include the likes of Toyota Yaris, Honda's new Amaze, Ford Freestyle, Mahindra's new XUV 5OO and Hyundai's new Creta.
"The industry has grown at a good pace for the last few quarters and new product launches have helped in countering headwinds like high oil prices and interest rates," said Sugato Sen, Deputy Director general, SIAM. "We do not give out any guidance for full year growth and it is still too early but we can safely hope for a high single digit growth in passenger vehicles."
The performance of the commercial vehicle segment was even better with sale of heavy trucks and buses registering an 80.23 percent jump in sales at 30,128 units. Sale of light commercial vehicles also grew 26.15 percent at 46,350 units pegging the overall commercial vehicle sales growth at 43.06 percent at 76,478 units. The growth however, should be taken with a pinch of salt as sales were particularly low in May 2017. A Supreme Court order banning sale of BS III vehicles from April 2017 onwards had led to massive stock clearance and advancement of purchases in the fag end of March, which meant low sales in the first quarter of 2017/18.
The only segment to not grow in double digits during the month was two wheelers that was bogged down by a marginal decline in sale of scooters. Sale of motorcycles grew by 15.16 percent at 1221,559 units but scooters declined by 1.4 percent at 555,467 units. This was the third straight month that scooters have lagged the growth of motorcycles, putting an end to its five years of continuous bull run.
"Motorcycles have definitely made a comeback in terms of growth and even in semi-urban areas, their demand is strong," Sen said. "We are told there was some inventory clearance in scooters by both Honda and Hero MotoCorp so it could be a one-off but the very fact that there was excess stock proves there seems to be a bit of a stagnation in demand. We can no longer say that the market can consume as many scooters as the industry can produce."