India sold more automobiles than Brazil and South Korea put together beating even Germany and the UK to emerge as the world’s fourth largest vehicle market during January-May this year . India clocked total sales of 1.64 million units during January-May this year to clinch the fourth spot beating European heavyweight Germany which saw sales of 1.60 million units during the same period.
China, US and Japan continue to dominate the top three spots, selling 11.18 million, 5.43 million and 2.30 million, respectively. China remained the biggest consumer of automobiles despite a slowing economy.
Speculations fueled by the potential impact of the Goods and Services Tax, which was implemented from 1st July 2017 on various vehicle segments, led customers to postpone sales. This brought a lull to the otherwise buoyant automotive market that was just on the cusp of witnessing recovery in domestic sales after some months post demonetization.
The industry produced a total 6,914,544 vehicles including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in April-June 2017 as against 6,431,938 in April- June 2016, registering a growth of 7.50 percent over the same period last year.
The sale of Passenger Vehicles grew by 4.38 percent in April-June 2017 over the same period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicle and Vans grew by 3.89 percent, 7.53 percent and (-) 2.96 percent respectively in April-June 2017 over the same period last year.
Passenger car market leader Maruti Suzuki India continued its domination in the domestic PV space by selling 93,057 units, representing a marginal growth of 1 per cent. The best performer for the carmaker was the utility vehicle segment where the Vitara Brezza, Gypsy, S-Cross and Ertiga are clubbed. It grew 43 percent during June 2017 to 13879 units. It was followed by the mid-size category where the sales of the Ciaz sedan were up by 41.1 percent to 3950 units. The Ciaz that comes in a mild hybrid option may soon face the GST after effects as hybrid vehicles will become costlier with a 43 percent tax structure under the new tax regime.
Arch rival Hyundai Motor India sold 37,562 units with a decline of 5.64 per cent followed by home grown Mahindra & Mahindra at the third spot with 16,169 units, down 5.27 per cent. Tata Motors dispatched 13,148 units, down 12.19 per cent, while Honda Cars sold 12,804 units during the month, up 12.25 per cent.
The overall Commercial Vehicles segment declined by (-) 9.08 percent in April-June 2017 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) declined by (-) 31.82 percent, while Light Commercial Vehicles grew by 7.78 percent in April-June 2017 over the same period last year.
Commercial vehicle manufacturer Ashok Leyland has staged an overall recovery in sales during the month of June 2017 growing 11 percent with sales of 12,330 units. During June 2017, the growth was led by light commercial vehicles at 29 percent with sales of 3,128 units. M&HCVs have grown 6 percent at 9,202 units.
The sales of the Medium and Heavy Commercial Vehicle (MHCV) segment of the Automobile industry has been dwindling because of the unpredictability this sector has faced for a number of years due to various Government policies as well as its concern for the rising pollution levels in the country. In addition, the heavy fines imposed on overloaded vehicles also failed to garner new vehicle sales in terms of making the segment profitable.
Three Wheelers sales declined by (-) 24.75 percent in April-June 2017 over the same period last year. Within the Three Wheelers, Passenger Carrier sales registered a de-growth of (-) 30.82 percent, while Goods Carrier grew by 3.68 percent in April-June 2017 over April-June 2016.
Two Wheelers sales registered a growth at 7.78 percent in April-June 2017 over April-June 2016. Within the Two Wheelers segment, Scooters and Motorcycles grew by 20.06 percent and 3.44 percent respectively, while Mopeds declined by (-) 10.92 percent in April-June 2017 over April-June 2016.
Segment leader Hero MotoCorp sold 12.49 per cent higher to 5,37,187 units during June as compared to 4,77,540 in the same month previous. Rival Honda Motorcycle and Scooter India (HMSI) sold 1,45,358 units last month as against 1,42,618 units in the same period of the previous fiscal, a growth of 1.92 per cent.
The Two Wheeler segment of the auto industry is poised to see positive sales over the next few months especially with forecasts of normal rainfall, a host of new launches and rise in rural incomes.
Overall sales for automobiles are expected to remain muted at least for a couple of months until everyone in the value chain—from manufacturers to dealers to buyers—become familiar with the new GST system.
In April-June 2017, overall automobile exports grew by 13.74 percent. While Passenger Vehicles, Three Wheelers and Two Wheelers registered a growth of 13.79 percent, 24.67 percent and 14.75 percent respectively, Commercial Vehicle exports declined by (-) 34.02 percent in April-June 2017 over the same period last year.
Exports during the month rose 95.8% to 13,131 units as against 6,707 in June last year for Maruti Suzuki. Ford India outpaced Hyundai for three consecutive months in shipping out vehicles and during the June quarter it led Hyundai by 15,813 units. During the period, Ford exported 48,971 units, up 54.37% over the year ago period, as compared with 33,158 units shipped by Hyundai, down 16.65%