Passenger vehicle sales speed up, industry expects to sell 3 million units in FY17
Automakers sold 2.78 million passenger vehicles in the local market in the fiscal year ended on March 31, 2016.
Asharp pickup in the market of late is boosting the confidence of automakers. After an impressive July, passenger vehicles’ sales in August are estimated to have grown 11-12 per cent to 2.45-2.50 lakh units, led primarily by strong demand for vehicles from Maruti Suzuki and Hyundai Motor India. They are hoping for a bumper festival season, supported by improved sentiment in the rural economy after good monsoon rains, salary hike for government staff and strong macroeconomic indicators.
Automakers sold 2.78 million passenger vehicles in the local market in the fiscal year ended on March 31, 2016. According an analysis done by ET, the market has expanded around 10 per cent during the period from April to August. The festival season starts in September with Ganesh Chaturthi and Onam.
Companies like Maruti Suzuki are already boosting their estimates for the year. The local market leader estimates sales to expand 11-12 per cent this fiscal year, compared with its earlier estimate of 7-8 per cent, Maruti Suzuki executive director RS Kalsi said.
"I am confident, entire industry is looking up. The buoyancy is being felt in the market and we feel the market is marching towards double-digit growth and we will try to do better than the industry," Kalsi told ET.
It is not just the wholesale push, but even the retail sales are matching the numbers and growth may be seen across carmakers, he said. Maruti Suzuki, which is facing capacity constraint, is tweaking holidays for staff as part of efforts to meet festival demand.
Anuraag Mehrotra, the executive director for sales and marketing at Ford India, said the company is already witnessing a strong momentum that comes with festivals.
"Our sales growth in Kerala in August was to the tune of 40 per cent, which is the highest seen in recent years. We expect this positive momentum to spread across the country," he said.
For the first eight months of this calendar year, the market has grown 6-7 per cent, but the festive season sale accounting for significant chunk of annual sales, Ford anticipates the market to break into double digits for fiscal 2017.
With interest rates at a low, fuel prices being fairly under control and discounting and offers to remain high, industry experts anticipate a buoyant festive season this year.
In the two wheelers space, too, manufacturers expect the growth momentum to continue.
YS Guleria, senior vice president of sales and marketing at Honda Motorcycle & Scooter India, said he expects cumulative growth of 20 per cent between August and November in two-wheeler sales.