Auto industry rides on high spirits

The new financial year has brought good news for the Indian automobile industry. Industry sales grew 17.44% in April driven by strong growth in the commercial vehicles segment, data from the Society of Indian Automobile Manufacturers released on Thursday showed.

April sales jumped to 2,379,718 units from 2,026,373 last year as commercial vehicles grew by 75.95% in April 2018.

Last year in April, sales were relatively flat after manufacturers sold their stocks at throwaway prices in March following a Supreme Court ban on the sale of vehicles running on older BS III fuel technology in the new financial year.

Auto experts are optimistic about sales this year.

“The auto sector has had a good start off the block with all categories showing a very respectable growth over the previous year,” said Sridhar V, partner, Grant Thornton India.

“Commercial vehicles though at the back of a low base have reported fabulous growth, it is expected to show a growing trend especially with the monsoon prediction being positive and a fair amount of that growth is expected to be also on account of replacements and strict enforcement of compliance with overloading,"

Auto production also soared 17.95% last month. Total production of passenger vehicles, commercial vehicles, and three- and two-wheelers rose to 2,645,618 vehicles in April 2018 from 2,242,965 in the same month last year.

Two-wheeler sales were the highest in the last three years and are close to breaching the 2 million mark which has happened only once in September 2017. Domestic sales of two-wheelers grew at 16.92% to 1,958,241 units in April 2018. But passenger cars or sedans grew at a slower pace of 4.89% compared to utility vehicles which grew 11.92%.

Overall automobile exports also grew by 24.21% but passenger vehicle exports declined by 15.89%.