The continuation of excise duty cuts and reduction in fuel prices over the past few months led to better sales for passenger cars in November, unlike in the previous two months.
Passenger car sales were up by 9.52 percent year-on-year, at 1.56 lakh in November, compared with 1.43 lakh in the same month last year, the Society of Indian Automobile Manufacturers (SIAM) said. However, the positive trend was driven by just a few companies, such as Maruti Suzuki India, Hyundai Motor India and Honda Cars India.
According to SIAM, car sales have been fluctuating this year and what is required to kickstart growth are steps such as extension of excise duty relief beyond December 31 and interest rate cut.
“Hopefully, we are on a recovery path. If you want it deep-rooted, interest rate cut is required so that people sitting on the fence start buying,” said Vishnu Mathur, Director General, SIAM.
The industry body said car companies are still under tremendous pressure as capacity utilisation of production continues to be only around 60 percent.
Overall, the passenger vehicles segment grew by 5.42 percent to 2.12 lakh units during November, compared with 2.01 lakh units in the same period last year.
In the two-wheeler segment, scooter sales fuelled the growth momentum with around 3.87 lakh sales during the month, up 26 percent, compared with around 3.05 lakh units in November 2013. However, motorcycle sales fell by 3 per cent y-o-y to around 8.53 lakh units (8.80 lakh units.)
The fall in overall motorcycle sales was mainly led by market leaders Hero MotoCorp and Bajaj Auto, which could not sell good numbers, even during the festival season because of low-sentiment in the rural areas.
“The decline in motorcycle sales was reflective of weak rural demand because of lower agricultural production due to the weak monsoon this year,” Sugato Sen, Deputy Director-General, SIAM, said.
In the commercial vehicles segment, both heavy and light commercial vehicles showed signs of growth during the month.