Passenger vehicle sales up 14% YoY

Rise attributed to low base, pent-up demand

After a prolonged negative growth across automobile segments, there is finally some good news to cheer the automobile industry, the third largest employer in the country.

Passenger vehicle sales in India, Asia’s third biggest economy, rose 14.16 per cent in August, showing some signs of economic recovery as industries restart operations months after a coronavirusinduced lockdown disrupted a sector already hit by poor demand.

In a sign of improved consumer sentiment, a total of 215,916 cars, utility vehicles and vans were bought in August, compared with 189,129 a year earlier, snapping nine months of declining trend in sales, the Society of Indian Automobile Manufacturers, or Siam, said on Friday.

Clearly, it was a good monsoon that drove up demand for two-wheelers, including motorcycles from the rural clusters. Sales of two-wheelers, widely seen as an indicator of the health of the rural economy, also jumped 3 per cent to 15,59,665 units, as compared to 15,14,196 units in the previous year.

Motorcycle sales were also up 10.13 per cent to

10,32,476 units, up from

9,37,486 units sold in August 2019 aided by a good rural and semi-urban demand.

However, scooter sales were down 12.3 per cent to

4,56,848 units last month, against 5,20,898 units in the previous year and three-wheeler slipped 75.29 per cent.

“We are beginning to observe growth, which is instilling confidence back into the industry,” Siam president Kenichi Ayukawa, also the MD at Maruti Suzuki, India’s biggest car maker, said in a statement.

“Even though the industry witnessed year-on-year growth in August 2020, it is to be recognised that the base figures in August 2019 itself was very low, as the industry had shown a degrowth of about (-) 32 per cent for passenger vehicles and (-) 22 per cent for twowheelers in 2019, over 2018, then. Still, 14 per cent growth of passenger vehicles and 3 per cent growth in two-wheelers in August

2020 indicates trends of recovery for the industry, though it is on the backdrop of pent-up demand and beginning of a festive season this month,” he pointed out.

Rajesh Menon, director

general at Siam, said, “After a period of lull... August has witnessed improvement in the sales figures of two-wheelers and passenger vehicles. However, three-wheeler segment continues to post a de-growth of more than (-) 75 per cent compared to

August 2019.”

The industry is positive that the coming festive season, which culminates in Diwali and sees a majority of buyers making big ticket purchases, would help with a faster revival in demand, he pointed out.