Car sales up 16% in April, most in 30 months

A low base helped the Indian automobile industry report impressive domestic sales growth of 16 per cent in passenger vehicles, the highest in 30 months.  

Medium and heavy commercial vehicle sales saw robust growth of 25 per cent as well. Sales of two-wheelers remained flat on declining motorcycle sales. 

Data released by the Society of Indian Automobile Manufacturers (Siam) today showed sales of passenger vehicles grew to 217,949 in April from the same month last year. Sequentially, however, sales dropped 11 per cent from 244,395 vehicles sold in March. 

The growth in passenger vehicles sales is driven only by Maruti, Hyundai, Honda and Toyota. Mahindra & Mahindra's sales remained flat while General Motors and Ford posted declines of 35 and 26 per cent, respectively. 

Export of passenger vehicles, accounting for less than a fifth of sales, also grew 21 per cent.

"The numbers in passenger vehicles indicate a trend of recovery, while growth is still away. Medium and heavy commercial vehicles, which were on a decline for over two years, have seen nine months of consecutive growth", said Vishnu Mathur, director-general of Siam. He added growth in commercial vehicle sales showed an uptick in industrial and mining activity.

Amit Kaushik, principal analyst at IHS Automotive, said the economic environment was mixed with inflation easing out as rural demand stayed weak and interest rates high. "It can potentially put pressure on vehicle sales in the coming months,·" he added. 

Domestic sales of two-wheelers, marred by income uncertainties in rural India, remained flat. Sales, however, are down sequentially by nearly three per cent from March. Sales of motorcycles, which account for the bulk of the two-wheeler market, declined 2.77 per cent from the same month last year. Motorcycle exports slipped 6 per cent.

Scooter sales, however, grew over 5 per cent in April. Industry leader Hero MotoCorp saw sales of motorcycles dip 5.44 per cent while sales at Honda Motorcycle and Scooter India (HMSI) remained flat. HMSI increased its scooter sales by 16 per cent while Hero's sales dipped by over 10 per cent. 

Exports in three-wheeler segment zoomed 79 per cent to 47,333 vehicles, much higher than domestic sales of 25,607.

Bajaj Auto, the market leader, saw exports more than double to 36,361 vehicles. Rakesh Sharma, president for international business  at Bajaj Auto, said the export number was an all-time high. Bajaj Auto expects to ship 30,000 vehicles every month to Bangladesh, Peru, Egypt and Ethiopia.