Car sales rise in November for 13th consecutive month

Car sales grew for 13th consecutive month in November, as weak demand in the rural markets continued to be a cause of concern.

Domestic car sales last month stood at 173,111 units, up 10.39 per cent from 156,811 units in November 2014, according to data released by industry body SIAM. Overall, Passenger Vehicle segment (which includes cars, utility vehicles and vans) saw 11.40 per cent rise in sales at 236,664 units.

For December, traditionally a month of low sales for the industry, sales are likely to be further impacted due to heavy rains in Chennai that have disrupted manufacturing of vehicles.

“Almost every segment has shown improvement, particularly passenger cars. The growth is marginal for Light Commercial Vehicles (LCVc) and two-wheelers which points to the fact that there are still issues with the rural economy and which is affecting the demand,” Society of Automobile Manufacturers (SIAM) Director General, Vishnu Mathur, said.

The increase in sales of passenger cars, he said, was driven by recent launches such as Maruti Baleno and Renault Kwid. There has also been some positive impact of the festival season which extended to November.

The growth in automotive industry is not broad based, Abdul Majeed, Partner at Price Waterhouse said. “Some segments such as CVs are growing with potential uptick in the overall economic activity while other segments such as passenger vehicles are growing due to positive factors such as low interest rate, lower fuel prices including the pent up demand…two wheeler volume remains flat mainly due to lower off-take especially in the rural market,” he said.

For a sustained growth in the automotive industry, Mr Majeed said, it was necessary to have a robust growth in the overall economy which in turn depends a lot more on the next level of reforms including introduction of GST.

Heavy rains in Chennai, which is one of the key hub for auto manufacturing accounting for over one third of the output, will impact December sales, SIAM’s Mr. Mathur said.

Total sales of two-wheelers rose 1.47 per cent last month to 13,20,561 units as against 13,01,434 units in November, 2014. While motorcycle sales rose 1.58 per cent to 866,705 units, Scooter sales grew 2.45 per cent to 3,96,024 units.

Sales of commercial vehicles were up 8.56 per cent to 51,766 units during the month.

Total vehicle sales across categories registered a 3.18 per cent increase to 16,54, 226 units from 16,03,312 units in November 2014, SIAM said.

[source:-The Hindu]