Auto Sector Grows Firm on the Upcoming Festive Season

Dynamic Equities | April 24, 2017, midnight

The Growth Inputs

The study indicates a strong revival in demand, backed by improved rural sentiment as well as the increasing urban demand due to increase in wages of government employees.

As per the data available with Society of Indian Automobile Manufacturers (Siam), domestic sales of passenger vehicles such as cars, utility vehicles and vans grew 16.7 per cent from a year earlier.

This was helped by strong performance from auto giants Maruti Suzuki, Mahindra, Toyota and Renault. These companies have stepped up wholesale dispatches to stock dealerships to match up with the festive demands.

Sales in the April-August period, first five months of the financial year, have improved by 11 per cent. Sales growth in September and October are expected to be higher.

A significant 26 per cent growth has been witnessed in the sales of the two wheels sectors. Motorcycles (bulk) volume increased by almost 22 per cent; scooters volume grew by 34 per cent.

Sales of light commercial vehicles grew 11 per cent in August to reach 32,459 units. Goods carrying LCVs grew 12 per cent to 28,635 units, while passenger carriers grew six per cent to 3,824 units.

The decline of medium and heavy commercial vehicles

The sales of medium and heavy commercial vehicles have continued to decline. Within this segment, goods carriers declined by almost 18 per cent to drop till 16,437 units. However, passenger carriers grew 35 per cent to reach 4,100 units.

According to Vishnu Mathur, director general at Siam, strong fleet replacement demand was driving growth and demand had been met. “This demand might come again, later this year”, he added.

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