Car sales bounced back to the positive territory in November after two months of decline, helped by a lower base to compare with, softer fuel prices and as manufacturers piled up stock to meet any sudden demand due the uncertainty over the extension of an excise duty relief. After a lacklustre festive season (September-October), car sales jumped by a surprising 10% in November to 1.56 lakh units. The biggest gainers were Maruti Suzuki and the local units of Hyundai Motor, Toyota Motor and Honda Motor which benefitted from new models launched in recent months, even as most players in the market continued to face weak demand.
One of the factors that had driven the sales higher was the falling ownership cost. The industry has been asking the government to extend the excise-duty stimulus beyond December when it is due to expire, and club it with the rollout of goods and service tax that proposes to combine several levies under one banner. There is a general feeling that the excise duty relief could be extended until the Budget announcement in February next year.
Car sales had declined for two consecutive fiscal years through March 2014. They posted marginal gains between May and August this year, but returned to the negative territory in September with sales falling 1.03% and again in October with a 2.55% fall.
While most manufacturers posted lower sales, only four major manufactures managed to post positive sales. In November, segment leader Maruti Suzuki grew 17% in the domestic passenger vehicle market, while Hyundai sales expanded 6%. Honda Cars India, posted the steepest increase at 64%. Toyota Kirloskar Motor sales rose 19%.Other vehicle segments posted marginal growth with two wheeler sales rising 5% to 13 lakh units. The growth was weak due to a 3% decline in motorcycle sales. The commercial vehicles segment posted a 9% increase in sales on the back of strong demand in the truck segment where volumes jumped 49%. Light commercial vehicle sales fell 2% in November.
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