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Auto body SIAM makes modest upgrade in FY15 growth outlook on improved sentiments

The Society of Indian Automobile Manufacturers (SIAM) expects passenger vehicle sales to rise three to five per cent in 2014-15, up from its earlier projection of one-two per cent, on improved consumer sentiment over the past few months.

With two months to go till the end of 2014-15, sales are up four per cent to 2.12 million vehicles.

“We have increased our outlook because sentiment has improved on the back of expectation of lower interest rates and a drop in fuel prices. But nothing else has changed and these factors can only sustain so much growth. For sharper growth, we will need changes like rationalisation of taxes,” Vishnu Mathur, director-general of Siam, told the Business Standard.

Despite a four-six per cent increase in excise duties in January, sales in the month were up over three per cent to 230,619 vehicles. This includes an over six per cent rise in utility vehicle sales to 48,681 and a three per cent rise in car sales to 169,300.

Market leader Maruti Suzuki posted a nine per cent jump to 105,559 vehicles, while rival Hyundai saw a four per cent jump to 34,780. Honda saw an almost 17 per cent jump to 18,331, while Tata Motors saw a seven per cent jump to 14,749. Mahindra & Mahindra, however, saw a seven per cent drop to 19,573.

Sales in December surprised by rising over 12 per cent to 209,025 passenger vehicles.

Medium and heavy commercial vehicle sales made the strongest rebound in the month, with 37 per cent growth to 21,363, while the overall commercial vehicle segment saw a five per cent rise to 52,481 as light commercial vehicle sales dropped nine per cent to 31,118. Tata Motors saw four per cent higher sales to 23,872 commercial vehicles, while Ashok Leyland saw 34.5 per cent higher sales to 9,480 vehicles.

“Truck sales are rising, but on an extremely low base. Motorcycle sales are negative because scooters have eaten into the market in urban areas, while the rural demand is down,” Mathur said.

Two-wheeler sales rose one per cent to 1.32 million. Bike sales fell for the fourth consecutive month, with an almost six per cent drop in January to 868,507, though scooters maintained a strong growth trajectory with a 25 per cent rise to 404,919. Hero MotoCorp saw a one per cent drop in sales to 546,169, while Honda Motorcycle and Scooter India recorded a 14 per cent rise to 377,502. Bajaj Auto saw its monthly volumes drop 23 per cent to 128,937.