FY’15 outlook positive for auto industry, M&HCV sector shows improvement in September

With early signs of economic recovery, the Society of Indian Automobile Manufacturers (SIAM) is bullish of the automotive industry ending 2014-15 on a positive note. The medium and heavy commercial vehicle (M&HCV) industry that saw negative growth for the last 30 months has started showing improvement in market performance. While the sales dip in M&HCVs is 1.22 percent during April-September 2014, September 2014 sales numbers point to a growth of 23 percent in domestic sales from 15,473 units in September 2013 to 19,035 units in September 2014.                 

“This growth is driven by the demand for trucks, which shows that the goods segment in M&HCVs has started improving,” said Vishnu Mathur, director-general, SIAM. In August this year the M&HCV sector started showing a growth of 9.61 percent from 15,468 units last year to 16,955 units this September.  

Commercial vehicles, both M&HCVs and LCVs, were down 4 percent in Q2 F15 over Q2 F14, with a 22 percent dip in Q2 F14 over Q2 F13. In September 2014, CVs grew 9 percent over the same month in 2013.

Improved consumer sentiment as also the government’s initiatives to bring in more foreign direct investment into the country and create jobs are being attributed as key reasons for the Indian auto industry’s performance picking up.

SIAM is pushing for continuation of the excise duty concessions that end on December 2014 so that the industry continues on the growth trajectory while stating that vehicle finance rates continue to be high due to high inflation. Also high diesel prices and commodity prices as well as fluctuating forex rates remain areas for concern.

“We need to watch government policy initiatives in terms of project implementation, infrastructure development and revival in mining activity. Industry needs to grow at a pace much faster than in recent times to get back to growth path,” Mathur added.

In September 2014, passenger vehicles grew 3.26 percent to 223,568 units (September 2013: 216,509) but passenger cars sales degrew at 1.03 percent for the first time in five months to 154,882 units (September 2013: 156,494).

“This could be due to customers postponing purchases of vehicles for the festive season. We expect October sales to be much better,” said Sugato Sen deputy director-general, SIAM. However, sales of utility vehicles continued to grow: 53,003 units, marking a growth of 24.88 percent while van sales degrew at 10.74 percent at 15,683 units. 

Three-wheelers posted a growth of 21.61 percent in domestic sales (56,948) while two-wheelers were the best vehicle segment performers during September at 23.81 percent (1,567,351) with the overall two-wheeler industry growing 20.44 percent during September 2014. The motorcycle sector's sales grew 19.34 percent during the month. Scooter sales maintained their strong position with sales of 438,470 units, a year-on-year growth of 37.99 percent. 

In September, overall industry sales totalled 1,904,007 units, up 20.44 percent (September 2013: 1,580,933). 

In comparison to September 2014 sales, the industry grew 13.80 percent during H1 (April-September 2014) with passenger vehicles growing 4.25 percent with passenger cars chipping in with a 4.09 percent rise. CV sales degrew at 10.14 percent with LCVs showing a higher dip at 14.39 percent. However, exports were better at 4.63 percent.

Three-wheelers grew 17.80 percent and two-wheelers 16.41 percent with scooters faring the best at 32.11 percent.