On Tuesday, the industry lobby group Society of Indian Automobile Manufacturers released a report with data stating the figures of passenger vehicles sales in India, in the month of April. As per the report, the sales of a personal vehicle in the month of April experienced a hike of 14.68% over last year’s sale. The sale was largely backed by the demand for compact cars.
As the effects of demonetization fade away, the demand for cars has risen. According to the experts, it will rise at the same rate through the fiscal year 2017-18.
This year, 277,000 units of passenger vehicles were sold in the month of April compared to the sale of 242,000 units in April, last year. The growth was largely driven by the sale of compact cars like Tiago by Tata Motors Ltd. & Baleno by Maruti Suzuki India Ltd.
On an overall basis, the sale of passenger cars increased by 17.36% to 190,000units. This was an enhancement to the last month trend where sports utility vehicles were in great demand and thus created the major share of the vehicle sales.
However, April was not good for utility vehicles as the sale dipped to 13.71% to 70,691 vehicles, compared to a good 30% growth in the segment in April last year.
“April 2017 is a good start for the Indian automotive industry. Many OEMs (original equipment manufacturers) with a good product line have registered significant growth in April 2017. The pent-up demand is driving the vehicle sales and the impact of demonetization is wearing off,” said partner and national auto practice leader at PricewaterhouseCoopers, Abdul Majeed.
Majeed also added that the industry expects the fiscal year to be lucrative considering the overall growth of the Indian Economy.
International Monetary Fund (IMF) also released a statement on Tuesday, stating that the initial disruptions that were caused because of the cash crunch would now fade away as the cash flow become steady in the country once again.
It also said that that the Indian Economy is likely to grow by 7.2% in FY18 & 7.7% by FY19. The report suggested removing all the bottlenecks in order to enhance the market efficiency.
Majeed in his statement said smooth implementation of goods and services tax (GST) and the monsoon are some factors that are a considerable issue. These challenges influence the generation of vehicle demand in the economy especially rural.
“The key to success depends on OEMs addressing the customer’s changing preferences through new launches, exceptional customer experience, excellent distribution network and touch points with customers,” he added.
Talking about the two wheeler section, in the two-wheelers segment, scooters are doing pretty well. In fact, even in rural areas, people are increasingly going in for scooters,” said Sugato Sen, director general, Siam.