NEW DELHI – Car sales grew 17% in July, the highest since April, boosted by a lower base and aggressive pricing by manufacturers.
According to numbers released by industry body Society of Indian Automobile Manufacturers (Siam), sales volumes in July stood at 1.6 lakh units against the near 1.4 lakh units sold in the same month last year. Car sales had reported 18% growth in April last year.
Companies have been launching new models such as Creta SUV by Hyundai and the S-Cross crossover by Maruti Suzuki, to create excitement in the market. Ford will drive in ‘Aspire’ entry sedan later this week and the upgraded Figo compact during the year. Mahindra will be driving in a new compact SUV around October-November, the festive season, while Maruti will introduce a new premium compact. Siam records wholesale deliveries in its report and these vehicles have been despatched to dealerships out of factories.
Sales of passenger vehicles, including utility ones and vans, were up a marginal 0.4%. Companies expect that with new launches from formidable companies such as Mahindra, Maruti and Hyundai in this category, the numbers will go up.
Car sales have been reeling under a severe slowdown for the last nearly three years, weighed down by weak economic growth, high interest rates and poor buyer sentiment. However, the demand has picked up over the last few months as the economy shows signs of improvement and interest rates show some signs of cooling off.
Sugato Sen, deputy director-general at Siam, said that demand is likely to improve in the second half of the fiscal with the start of the festive season.
The auto industry is also relieved as the monsoon is not turning out to be as bad as was originally predicted. “Rural markets were turning out to be an issue, but the rainfall has been much better than what we were fearing initially,” Sen said.
However, the motorcycle industry is suffering due to rural woes and volumes fell 6%. Sen said demand is expected to pick up in this category in the coming months.
