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Passenger vehicle sales may grow 6-8% in FY 2015-16: SIAM

Auto makers had sold more than 2.6 million passenger vehicles in fiscal 2015, a 3.9 per cent increase from the year before.

, ET Bureau|
Oct 10, 2015, 04.00 AM IST
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Auto makers had sold more than 2.6 million passenger vehicles in fiscal 2015, a 3.9 per cent increase from the year before.
Auto makers had sold more than 2.6 million passenger vehicles in fiscal 2015, a 3.9 per cent increase from the year before.
NEW DELHI: Passenger vehicle sales are expected to grow 6-8 per cent this fiscal year, driven by new models, benign inflation and low interest rates, the nation’s top automobile industry association said. The Society of Indian Automobile Manufacturers (SIAM) expects no spike in volume during the current festival season, but predicts demand to pick up towards the end of the fiscal year.

Auto makers had sold more than 2.6 million passenger vehicles in fiscal 2015, a 3.9 per cent increase from the year before.

SIAM forecasts medium and heavy commercial vehicle sales to grow in the double digits this fiscal year, helped by improvement in industrial GDP and higher replacement demand. Motorcycle sales are projected to remain flat.

In September, car sales grew about 9.5 per cent. But a steep fall in utility vehicle volume meant total passenger vehicle sales rose just 3.8 per cent. For the first six months of the fiscal year, the passenger vehicle segment posted 6.2 per cent growth, which is in line with the prediction for the year.

Passenger vehicle sales may grow 6-8% in FY 2015-16: SIAM

"The growth in the Indian automotive industry this year so far has not been up to its potential," said Abdul Majeed, partner at Pricewaterhouse. "The increase in September 2015 passenger vehicle sales is mainly driven by new launches, especially compact SUV, hatchback, etc."

SIAM doesn’t expect any change in the trend during the festival season, when sales typically increase. "The spike will come in March," said Deputy Director-General Sugato Sen. According to SAIM, while the economy is showing an improvement, the automobile industry has yet to experience the momentum.

The cost of vehicle ownership is expected to remain stable in 2015-16 for petrol vehicles, SIAM said. For diesel, it is estimated to be lower by 2-4 per cent. Petrol and diesel prices are expected to decline by 6-8 per cent and 12-14 per cent, respectively, from 2014-15, said the association which expects diesel vehicle demand to moderate.

Two-wheeler sales continued to be in the negative territory with sales falling 1 per cent in the past month. Scooter sales growth moderated in September at 6.54 per cent. "Growth in the scooter segment is expected to further moderate due to the impact of weak demand in the rural area. Motorcycle sales will improve because of the low base," Sen said.

Commencement of some mining and infrastructure project boosted M&HCV sales, which grew nearly 64 per cent. Light commercial vehicle sales, however, fell 14.5 per cent. Overall, commercial vehicle sales grew more than 12 per cent in the past month. According to SIAM, LCV demand is expected to remain flattish in fiscal 2016.

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