India’s automobile industry posted strong growth for the second consecutive month in the current financial year. According to data from the Society of Indian Automobile Manufacturers (SIAM), which was released on Monday, total May sales rose 12.13% to 2,282,618 units from 2,035,610 units in the year-ago period, which averages to daily sales of 73,632 units.

While the growth is lower than April’s figure of 17.44%, analysts said the pre-festive, pre-monsoon season could be the reason behind the drop in sales growth figures over last month. In April, automobile sales rose 17.44% to 2,379,718 units from 2,026,373 units in the year-ago period, according to SIAM.

“April was a fabulous month but May is less fabulous because it has shown a de-growth on a sequential basis. The spike is generally seen after the monsoon. Maybe because of the pre-monsoon there is little bit of a dip. But it is still big growth vis-à-vis the previous year,” said Sridhar V, partner, Grant Thornton India. “In my view, the positive trend is going to be there for some more time.”

The major driver for last month’s growth was medium and heavy commercial vehicles—which includes both passenger and goods carriers—which grew 80.23% to 30,128 units from 16,716 units in the year-ago period. Overall, the commercial vehicles (CV) segment grew 43.06% to 76,478 units. Sales of three-wheelers stood at 54,809 units registering 51.97% growth while two-wheeler sales grew the slowest at 9.19% to 1,850,093 units from 1,694,323 in May 2017.

Passenger cars sales grew 19.64% from 199,479 to 166,732 units, while the overall passenger vehicles segment—which includes cars, utility vehicles and vans—grew by 19.65%. Last month, this segment grew 7.50%, with passenger cars growing 4.89%.

Automakers are crediting their new launches for this jump in sales growth. “We are delighted with the customer response to the all new Amaze which has helped our overall sales grow by 41% in May 2018,” said Rajesh Goel, senior vice-president and director, sales and marketing, Honda Cars India.

SIAM also reported that production across segments grew 12.57% to 2,732,973 units in May, from 2,427,722 units from the year-ago period. While overall automobile exports grew 24.21% to 400,855 units in April-May, passenger vehicle exports fell by 15.89%, and exports of CVs, three-wheelers and two-wheelers registered a growth of 51.99%, 88.16%, and 26.85%, respectively.

“Overall, the auto industry continues with the growth momentum. We are expecting that through the year, the industry will grow across segments,” said Sugato Sen, deputy director-general, SIAM. He explained the drop in the scooter segment to inventory corrections at Honda 2Wheelers India and Hero MotoCorp.

Last year, the Supreme Court had banned the use of Euro-III (and older) vehicles. The court, in its judgment, said health concerns of citizens took precedence over any financial losses for companies and that automakers must manufacture vehicles that adhered to Euro-IV norms from April 1, 2017, as they were less polluting. Sen said this had resulted in some disruption in the supply chain.

“People were not getting parts and so sales went down and companies couldn’t manufacture vehicles the way they wanted. On that low base last year, this 80% growth is significant,” Sen said, explaining that usually March sales hit a peak and then there is a fall; but sales pick up after the monsoon season.

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