Domestic sales for most of the Automobile OEMs have recovered sharply in the month of July 2017 after they declined in the month of June 2017. In the first month since the Goods & Services Tax was introduced, the automobile sector, one of the major beneficiaries due to reduced taxation in all vehicle categories other than hybrids, is seeing a smart uptick in demand. And in the run up to the festive season which begins in the month of August, consumer demand is likely to burgeon.
The industry produced a total 9,315,809 vehicles including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in April-July 2017 as against 8,599,803 in April- July 2016, registering a growth of 8.33 percent over the same period last year.
The sale of Passenger Vehicles grew by 7.29 percent in April-July 2017 over the same period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicle and Vans grew by 5.15 percent, 14.98 percent and 0.09 percent respectively in April-July 2017 over the same period last year.
Car market leader Maruti Suzuki India Ltd’s domestic sales rose 22.4% to 154,001 units in the month of July 2017 from a year ago. A 25.3% increase in sales of compact models, including the Swift, Ritz and Baleno, led the sales growth. Driven by the popularity of the Brezza, sales of utility vehicles advanced 48.3% to 25,781 units in July.
Mahindra & Mahindra (M&M) has reported sales of 20,962 vehicles in July 2017 from its PV business, registering strong 21 percent YoY growth (July 2016: 17,356).
The overall Commercial Vehicles segment declined by (-) 3.67 percent in April-July 2017 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) declined by (-) 22.94 percent, however, Light Commercial Vehicles grew by 10.43 percent in April-July 2017 over the same period last year.
All major CV manufacturers have registered higher growth across both the M&HCV and LCV segments. Market leader Tata Motors, which has seen a correction in its sales over the past three months, has returned to growth territory with overall sales up by 15 percent in July. Similarly, Ashok Leyland, the second largest CV player, which also saw sales fall in the first two months of FY2018, posted 14% growth in July.
Three Wheelers sales declined by (-) 21.33 percent in April-July 2017 over the same period last year. Within the Three Wheelers, Passenger Carrier sales registered a de-growth of (-) 26.60 percent, however, Goods Carrier grew by 2.98 percent in April-July 2017 over April-July 2016.
Two Wheelers sales registered a growth at 9.24 percent in April-July 2017 over April-July 2016. Within the Two Wheelers segment, Scooters and Motorcycles grew by 18.16 percent and 6.58 percent respectively, while Mopeds declined by (-) 13.04 percent in April-July 2017 over April-July 2016.
Hero MotoCorp stands out as the biggest volume gainer (91,156 units) followed by Honda Motorcycle & Scooter India (HMSI) which added 82,388 units to its July 2016’s performance. TVS reported total domestic sales of 219,396 units last month, registering conservative YoY growth of 6.19 percent. For TVS, scooter sales rose 35.8 percent to 92,378 units and its motorcycle sales grew 15.1 percent to 109,427 units in July 2017. Bajaj Auto sold 164,915 motorcycles in July 2017, down 5.40 percent YoY (July 2016: 174,324).
The good performance of most of the Two-Wheeler OEMs can be attributed to the revival in rural demand backed by above average rainfall, positive market sentiment, GST-driven price cuts and low channel inventory.
In April-July 2017, overall automobile exports grew by 11.09 percent. While Passenger Vehicles, Three Wheelers and Two Wheelers registered a growth of 11.98 percent, 17.15 percent and 12.29 percent respectively, Commercial Vehicle exports declined by (-) 34.42 percent in April-July 2017 over the same period last year.