Passenger vehicle sales likely to grow by 10%: Fitch report

Passenger vehicle  sales likely to grow by 10%: Fitch report

 Low fuel prices and falling interest rates are likely to support Indian passenger vehicle (PV) growth during 2016, according to a latest report by Fitch Ratings. PV sales are likely to be up by around 9-10 per cent, after rising by 7.4 per cent in January-October 2015 year-on-year (yoy), driven by new model launches and the decline in fuel prices.

Rising disposable income will also support the growth in PVs. Furthermore, the recent announcement of salary rises for government employees by around 23.5 per cent (effective 2016) is likely to provide a one-off boost for vehicle sales, Fitch stated.

According to Fitch, two wheeler sales are likely to remain muted in 2016. “Two-wheeler growth is likely to remain muted at around two-three per cent in 2016. Two-wheeler sales rose by 1.1 per cent during January-October 2015, with the low figure due largely to falling sales of motorcycles (-3.7 per cent). Strong growth in scooters (15.1 per cent) has resulted in the overall marginal positive growth for two wheelers,” Fitch said.

We expect scooter sales – focused largely in urban areas – to remain strong. But motorcycle sales are likely to remain weak in H1 of 2016, given the fall in rural spending following weak monsoon rains, Fitch added.

Fitch also believes that competition is only likely to rise further. “Competition is set to intensify further in PVs and two wheelers, driven by new model launches and improved offerings across most auto manufacturers. The strong pipeline of new product launches is likely to result in the higher research and development and capex for the Indian manufacturers – mainly Tata Motors and Mahindra and Mahindra,” Fitch states.

India’s domestic passenger car sales jump over 10 % in November: SIAM

Passenger car sales in India rose 10.39 per cent in November — the 13th consecutive month of growth — as the domestic auto industry continues to drive on the slow road to recovery. According to the data released by Society of Indian Automobile Manufacturers (SIAM), domestic car sales in November stood at 1,73,111 units compared with 1,56,811 units in the same month last year.

Overall passenger vehicle sales during the month grew by 11.4 per cent to 2,36,664 units as against 2,12,437 units in the year-ago period.

“It is the 13th consecutive month of growth for the passenger cars. We posted some growth during November but rural off take remains pretty low and is pulling us down,” Siam Director General Vishnu Mathur said.

The growth has come from recent launches like Maruti Baleno and Renault Kwid and also there has been some positive impact of the festival season which extended into some part of November, he added.

“It’s a slow recovery process that is happening in the car segment but situation in the rural markets is not very encouraging,” Mathur said.

When asked about the sales forecast in the remaining part of the fiscal, he added: “As we said earlier, we expect the passenger vehicle segment to grow in the range 8-10 per cent”.

During the month, market leader Maruti Suzuki India posted a growth of 10.57 per cent in its passenger vehicles sales at 1,10,599 units. Its car sales rose 8.71 per cent to 89,479 units during the period.

Rival Hyundai Motor India saw its passenger vehicle sales increase by 22.92 per cent to 43,651 units in November, driven by newly launched SUV Creta.

Its passenger car sales jumped 6.55 per cent to 37,771 units during November compared with 35,448 units in the same period of previous year.

Honda Cars India’s sales stood at 14,276 units as against 11,612 units in the same month last year, up 22.94 per cent, SIAM said.

Homegrown Tata Motors’ domestic car sales were at 9,172 units compared with 10,286 units in the same month previous year, down 10.83 per cent.

Utility vehicles major Mahindra & Mahindra saw its sales rise 37.27 per cent to 18,686 units as against 13,612 units in November last year, riding on new model TUV300.
As per Siam data, motorcycle sales rose 1.58 per cent to 8,66,705 units in November as against 8,53,257 units sold during the same month last year.

Mathur said: “Lack of growth in the motorcycle sales is a cause of concern of us. Even the scooter sales, which is an urban phenomenon, have gone down.

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