India’s passenger vehicle industry reported its worst performance in five years in the just-ended fiscal as higher fuel prices, increase in insurance costs, lack of financing options and farm distress crimped demand.
Scooter sales grew at the slowest pace in 14 years, underscoring a slowdown in demand in urban markets.
Sale of cars, sport utility vehicles and minivans grew 2.7% in the year ended 31 March to more than 3.37 million vehicles, shows data issued by the Society of Indian Automobile Manufacturers. It was the worst performance since FY14 when sales fell 6%.
Vehicle sales in India are counted as wholesales, or factory dispatches.
Considering the continued pressure on sales and prevailing market uncertainty, the industry lobby group has projected a modest 3-5% rise in passenger vehicle sales in FY20. Commercial vehicle sales are forecast to do better, with a 10-12% growth in anticipation of strong advance purchases by fleet owners towards the end of FY20 before the implementation of stricter Bharat Stage-VI emission norms, which will make vehicles costlier. Two-wheeler sales are predicted to grow 5-7%.
Retail demand for passenger vehicles in India slowed especially in the second half of the fiscal, forcing auto makers to cut production amid rising inventory levels. Car market leader Maruti Suzuki India Ltd trimmed production by about 20% in March.
Meanwhile, with urban demand staying subdued, scooter sales fell 0.27% to 6.7 million units in the last fiscal. This was the first drop in the scooter segment since a 1.45% decline in FY06.
Motorcycles fared better, posting a 7.8% increase to nearly 13.6 million units on the back of better demand in rural and semi-urban markets.
In addition to higher petrol prices and increase in product prices by manufacturers, a rise in the cost of third-party insurance prompted many to defer their purchases.
Commercial vehicle sales, an indicator of economic activity, climbed 17.55% in the last fiscal to touch the one million sales milestone for the first time.
Medium and heavy commercial vehicle sales grew 15% to 390,740 units, while light commercial vehicle sales increased 19% to 616,579 units.
Robust growth in the commercial vehicle segment in the first half of the fiscal helped to partly offset demand weakness in the second half due to a squeeze in financing options from NBFCs following the crisis at Infrastructure Leasing and Financial Services, as well as revised axle norms that allowed trucks to carry more freight.
On the retail side, passenger vehicle registrations rose by 3.68% to 3.2 million units, while commercial vehicle registrations jumped 22% to 97,8811 units in FY19, according to the vehicle registration data available on the government’s Vahan website.
Sales of two-wheelers increased by 9.6% to 1.65 million units.
Scooter sales grew at the slowest pace in 14 years, underscoring a slowdown in demand in urban markets.
Sale of cars, sport utility vehicles and minivans grew 2.7% in the year ended 31 March to more than 3.37 million vehicles, shows data issued by the Society of Indian Automobile Manufacturers. It was the worst performance since FY14 when sales fell 6%.
Vehicle sales in India are counted as wholesales, or factory dispatches.
Considering the continued pressure on sales and prevailing market uncertainty, the industry lobby group has projected a modest 3-5% rise in passenger vehicle sales in FY20. Commercial vehicle sales are forecast to do better, with a 10-12% growth in anticipation of strong advance purchases by fleet owners towards the end of FY20 before the implementation of stricter Bharat Stage-VI emission norms, which will make vehicles costlier. Two-wheeler sales are predicted to grow 5-7%.
Retail demand for passenger vehicles in India slowed especially in the second half of the fiscal, forcing auto makers to cut production amid rising inventory levels. Car market leader Maruti Suzuki India Ltd trimmed production by about 20% in March.
Meanwhile, with urban demand staying subdued, scooter sales fell 0.27% to 6.7 million units in the last fiscal. This was the first drop in the scooter segment since a 1.45% decline in FY06.
Motorcycles fared better, posting a 7.8% increase to nearly 13.6 million units on the back of better demand in rural and semi-urban markets.
In addition to higher petrol prices and increase in product prices by manufacturers, a rise in the cost of third-party insurance prompted many to defer their purchases.
Commercial vehicle sales, an indicator of economic activity, climbed 17.55% in the last fiscal to touch the one million sales milestone for the first time.
Medium and heavy commercial vehicle sales grew 15% to 390,740 units, while light commercial vehicle sales increased 19% to 616,579 units.
Robust growth in the commercial vehicle segment in the first half of the fiscal helped to partly offset demand weakness in the second half due to a squeeze in financing options from NBFCs following the crisis at Infrastructure Leasing and Financial Services, as well as revised axle norms that allowed trucks to carry more freight.
On the retail side, passenger vehicle registrations rose by 3.68% to 3.2 million units, while commercial vehicle registrations jumped 22% to 97,8811 units in FY19, according to the vehicle registration data available on the government’s Vahan website.
Sales of two-wheelers increased by 9.6% to 1.65 million units.
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