Market leader Maruti Suzuki India retained its top position with a double-digit growth of 10.59%. (Representative Image: Reuters)
Passenger vehicle sales crossed the 3-million (30,46,727 units) milestone in FY17, registering a 9.2% growth, data released by the Society of Indian Automobile Manufacturers showed on Tuesday. This high growth, which meets the industry’s projection, was driven largely by the sales of sports utility vehicles (SUVs) which recorded a growth of 29.9% during the year. Car sales witnessed only a 3.85% growth in a clear sign that consumers now prefer SUVs. The growth in PV sales is highest since FY14 when it grew by 52%, while the growth in car sales is lowest since FY15 when it grew by 5.09%.
For FY18 SIAM, however, has projected a flattish growth of 7-9% for passenger vehicles as it feels that rising input costs and oil prices would lead to an increase in ownership costs which would impact demand. Base effect would also come into play. However, independent projections peg a higher growth in FY18. “The PV market is expected to continue its momentum to register 8-11% growth in FY18 on the back of pent-up demand, coupled with new model launches, personal income tax reduction in the low-income slab and a likely scrappage policy,” Rakesh Batra, pan-India automotive leader, EY, said.
Market leader Maruti Suzuki India retained its top position with a double-digit growth of 10.59%. Rival Hyundai Motor India was a distant second with a growth of 5.24% followed by Mahindra & Mahindra, where growth was down 0.07%.
Motorcycle sales during the year at 1,10,94,543 units grew by 3.68% missing SIAM’s projections of 7-9% growth. The industry body has projected a moderate growth in the current fiscal also. In case of scooters, sales during FY17 at 56,04,601 units, was up 11.39%. The industry body has projected a double-digit growth for scooters in the current fiscal also.
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On an overall basis, two-wheeler sales witnessed 6.9% growth during the period after clocking a double-digit growth in H1FY17. “Going forward, the segment is expected to witness a growth of 8-10% in FY18 on the back of pent-up demand, rural spending schemes by the government, commitment to doubling farm incomes by 2020 and personal income tax reduction in the low-income slab. Scooter sales are expected to stay strong, however, increase in base will likely result in lower growth rates,” EY’s Batra said.
Commercial vehicle sales grew 4.16% to 7,14,232 units, missing projections of around 10% growth again. The projection for the current fiscal is also at 4-6%.