Passenger car sales fall 8.4% in December

Festive season offers have not helped the auto industry in India see a sales uptick in December as overall vehicle sales fell 13.08% from a year ago, data from the Society of Indian Automobile Manufacturers (SIAM) shows; sales across categories fell to 14.05 lakh units from 16.17 lakh units.

Sales of passenger cars, the largest segment by volume, fell 8.4% to 1,42,126 units, while that of two-wheelers, the second-largest segment, fell 16.6% to 10,50,038 units.

However, sales of passenger vehicles—which include cars, utility vehicles (UVs) and vans—fell just 1.24% thanks to a 30% spike in sales of UVs. Of the 2,35,786 passenger vehicles sold, 85,252 were UVs. The segment is believed to have benefitted from new launches. “Three months rolling average growth indicates partial recovery in passenger vehicle segment driven by new launches in utility vehicles,” SIAM said. “Slowdown in economy and low consumer sentiment are still impacting fundamental demand. Vans sales were also impacted on availability and affordability of finance.”

Sales of commercial vehicles (light, medium, and heavy) fell 12.32% to 66,622 units in December. “SCVs (small commercial vehicles) and pickup sales have seen partial recovery in Q3-FY20. The sector continues to get impacted due to drop in consumer durables sales and flat growth in crop production. Decelerating GDP growth rate to six-year low and axle norm increasing freight capacity of trucks by 25% has resulted in lowering fleet addition and impacted MHCV Goods sales,” SIAM said.

Total production fell 5.22% to 1,816,112 units from 1,916,213 units. However, exports, which has been rising month after month, grew 8.75% to 410,499 units.

For over a year, the industry has been facing headwinds due to rising fuel and commodity prices, low consumer sentiment, the introduction of BS-VI emission norms, and uncertainty over the transition to electric vehicle technology.

In its third-quarter review, SIAM had said that the government’s focus on reviving the economy, good-incentivised vehicle scrappage policy, BS-VI pre-buy, and revival of rural demand would be some of the overall growth enablers for the industry.