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Car sales growth moderates in May; low rural demand pulls down two-wheelers

By PTI
10 June, 2015

Car sales in India grew for the seventh month in a row in May with a jump of 7.73 per cent as the auto industry stayed in the slow lane on the path to recovery.

Declining motorcycle sales remained a cause of worry.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in May this year stood at 1,60,067 units against 1,48,577 units in the year-ago month.

“Currently, we are in a slow recovery mode, with some segments showing growth and some declining. Even those segments like cars, which have shown growth, haven’t reached peak levels,” SIAM Director General Vishnu Mathur told reporters here.

He said falling sales of motorcycles and light commercial vehicles (LCVs) showed that not all is well with the rural economy.

Motorcycle sales last month slid 3.04 per cent to 9,53,322 units, from 9,83,210 units in May last year, while those of LCVs were down 7.19 per cent at 28,226 units against 30,414 units a year ago.

“For LCVs, barring an increase in September 2014, the segment has been witnessing decline for the past 25 months,” Mathur said.

But he struck an optimistic tone, saying that with consumer sentiment improving, demand in the car segment is likely to gain traction as banks start to pass on rate cut benefits to consumers.

In May, market leader Maruti Suzuki India saw its sales grow 14.29 per cent to 85,190 units against 74,536 units in the year-ago period.

Likewise, Hyundai Motor India posted a growth of 3.8 per cent at 37,328 units compared with 35,955 units in May last year.

Honda Cars India, however, had a decline of 8.78 per cent at 12,134 units against 13,303 units a year ago.

In the case of Tata Motors, sales rose 32.37 per cent to 9,176 units against 6,932 units in the same month last year while those of Mahindra & Mahindra slipped 4.77 per cent at 16,980 units compared with 17,831 units last year.

Mathur said the auto industry is hopeful of a better monsoon this year based on forecast by SkyMet, which SIAM tracks.

In May, total vehicle sales across categories registered a decline of 0.58 per cent to 16,83,962 units, from 16,93,740 units in May 2014, SIAM said. 

According to SIAM, total two-wheeler sales in May declined 1.25 per cent to 13,80,950 units mainly due to a dip in motorcycle sales and also moderation in sales of scooters.

During the month, motorcycle market leader Hero MotoCorp saw its sales decline by 3.04 per cent to 5,09,427 units as against 5,25,449 units in May last year.

Rival Bajaj Auto also saw its bike sales drop by 3.18 per cent to 1,70,668 units compared with 1,76,277 units in the corresponding month last year, while that of Honda Motorcycle and Scooter India (HMSI) also declined by 9.53 per cent to 1,38,150 units as against 1,52,714 units in May 2014.

According to SIAM, scooter sales in May this year grew by 2.61 per cent at 3,64,073 units as against 3,54,808 units in the same month last year.

“Even in scooters, we are also witnessing moderation of growth from high double digits to low single digit and this is definitely a worrying sign,” Mathur said.

Scooter market leader HMSI posted a growth of 13.63 per cent in May at 2,15,259

units as against 1,89,422 units in the same month last year.

Hero MotoCorp, however, saw its scooters sales decline by 20.52 per cent at 50,795 units compared with 63,911 units in the same month last year. Chennai-based TVS Motor posted scooter sales of 51,388 units as against 49,405 units in the same month last year, up 4 per cent.

Sales of commercial vehicles grew 3.95 per cent to 48,841 units in May, SIAM said.


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Car sales growth moderates in May; low rural demand pulls down two-wheelers

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