Sales of domestic passenger vehicles (PVs)—the largest segment by volumes in the country—grew 17.02% to 726,232 units in July-September, from 620,620 units in the corresponding period last year, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday.

“In the month of September 2020, the auto industry witnessed improvement in the sales of passenger vehicles by 26.45%, and two-wheelers by 11.64%, while sales of three-wheelers registered a de-growth of -71.91%, as compared to September last year," Rajesh Menon, director general, SIAM said.

The industry, reeling under a slowdown for almost two years, is finally seeing some recovery. Automakers believe the Covid-19-induced lockdown, unexpectedly, proved to be a major contributing factor in building demand for passenger vehicles. Ever since the pandemic struck and social distancing measures became a part of daily life, there has been a renewed interest in buying a personal mobility vehicle, as people increasingly look to move away from public transport.

“The Indian automotive industry is working hard amidst this tough Covid-19 situation to increase production and sales, while ensuring the safety of customers and employees across the whole value chain," Kenichi Ayukawa, president, SIAM said.

However, in its latest report, ratings agency ICRA wasn't so upbeat about the PV segment's FY21 volumes. The report said that the volumes are likely to see a 22%-25% fall, as its fortunes are tied to GDP growth rate and overall consumer sentiment, which currently are at historic lows.

Passenger vehicle was the only segment to show some positive growth in the period. All other segments, such as two-wheelers, three-wheelers, and commercial vehicles showed zero to negative growth. The two-wheeler segment, which is India’s second-largest by volume, reported a meagre increase of 0.17% to 4,690,565 units in July-September ,from 4,682,571 units in the year-ago period. Commercial vehicles (CV) segment, too, reported a fall of 20.13% in the period, while three-wheelers fell by 74.63%.

Cumulatively, the industry saw a slight growth of 0.98% on the back of 5,596,223 units of domestic sales in the period. While total sales showed a slow rate of recovery, July-September’s exports and production figures took a beating. India's exports fell by 20.81%, production suffered a drop of 7.08% in the same period.

Ayukawa said that in the second segment some have shown signs of recovery. "Passenger vehicles and two-wheelers are positive, although on a very low base of previous year. We are expecting good demand in the festive season starting tomorrow. Thanks to government intervention, auto loan interest rates are below 8%, the lowest in a decade and that should encourage customers to purchase new vehicles," he said.

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