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Festival demand, good monsoon put car sales in full throttle

Passenger vehicle segment posts 16% growth in August

Ajay Modi  |  New Delhi 

Festival demand, good monsoon put car sales in full throttle

In full festive throttle, the passenger vehicle (cars, utility vehicles and vans) segment has posted strong double-digit domestic sales growth of over 16 per cent in August. Sales have been strong, with dealers stocking up for the festive demand. Others positive triggers have been a good monsoon, higher pay for government employees and lifting of the ban on 2,000 cc diesel vehicles in the Delhi-National Capital Region (NCR).

With a double-digit growth in the April-August period, the industry looks well-placed to post a double-digit growth in FY17 after a five-year gap. The industry sold a record 2.78 million passenger vehicles in FY16 and, so, a double-digit or even high single-digit growth on top of that means approximately three million vehicles will be sold this year.

Growth in August was led by leading players like Maruti Suzuki and Mahindra & Mahindra (M&M). French carmaker Renault also contributed significantly by selling 11,445 units more than last August. Maruti Suzuki reported a strong double-digit growth of 12.3 per cent and sold 119,906 units. The growth comes from models like Ciaz, Baleno and Brezza. The mini segment, comprising Alto and WagonR, however, declined six per cent. R S Kalsi, executive director (marketing & sales) said on Wednesday that the company will post better volume growth going ahead due to festive demand.

Festival demand, good monsoon put car sales in full throttle
The second largest player, Hyundai, is estimated to have grown sales by 6.7 per cent to over 43,201 units. Rakesh Srivastava, senior vice-president (sales & marketing) at the Korean automaker said good monsoons and positive macroeconomic factors will continue to support the demand for cars.

Utility vehicle major M&M, the third largest player, reported growth of 28.5 per cent in sales last month. “The improved spread of monsoon as well as new product launches have helped the auto industry perform positively. Coupled with this, the uncertainty surrounding diesel vehicles has been lifted by the Supreme Court, giving the customers the choice to buy his/her preferred vehicle, which will help improve sentiments going forward,” said Pravin Shah, president & chief executive (automotive), M&M.

Tata Motors has also reported a double-digit growth with the help of its new hatchback, Tiago. Toyota, which launched a new Innova in May this year and petrol variant of Innova last month, has grown sales by 14.7 per cent. Its growth also comes as it resumed sales of diesel Toyota and Fortuner in NCR after Supreme Court lifted the eight-month old ban on August 12.

Renault continued to see a strong three-digit growth on the back of its small car Kwid, launched in September last year. Its alliance partner, Nissan, also registered a three-digit growth with the help of its new vehicle Redi-GO. Volkswagen and Ford saw a growth of six and two per cent, respectively.

Some, however, are yet to reverse months of decline. Japanese auto major Honda saw yet another month of decline. Its sales declined 11 per cent. General Motors also saw another month of decline.

“There is excitement in the market due to new products and other positive triggers like monsoon, higher salaries of government employees and the festive demand,” said Amit Kaushik, country head (India) for UK-based automotive consulting firm JATO Dynamics.

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First Published: Fri, September 02 2016. 00:50 IST