New Delhi: Passenger vehicle sales fell 5.6% year-on-year to 292,658 units in September, with demand hit by rising auto fuel prices, along with the high base in the year-ago period. An increase in insurance premium for automobiles also affected two-wheeler sales across the country, according to data released by the Society of India Automobile Manufacturers (SIAM) on Friday.
Passenger car sales declined 5.6% year on year to a three-month low of 197,124 units, while the same for the sports utility segment — the volume driver of the whole passenger vehicle segment — fell 8.2% to 77,378 units.
According SIAM president Rajan Wadhera, the decline in sales of passenger vehicles was due to the decline in customer sentiment due to the rise in crude oil prices. Also, the Navratri festival last September increased the base for the corresponding period.
“We expect passenger vehicle sales to grow in the second half of the financial year on the back of a good festive season. We also expect passenger vehicle sales to match our growth outlook of 9-11% by the end of the year,” according to Wadhera.
Commercial vehicle sales rose 24.1% year on year to 95,867 units, while sales of medium and heavy commercial vehicle sales — an indicator of economic activity — increased 25.9% to 39,208 units, and that of light vehicles rose 22.9% to 56,659 units.
Higher insurance premium and a slowdown in sales in Kerala and West Bengal also hit two-wheeler sales. Overall, two-wheeler sales rose 4.1% year on year to 2,126,484 units, even as sales of scooters declined 2.9% to 666,476 units. Motorcycle sales grew 7% year on year to 1,360,415 units, riding on a revival in the rural economy due to near-normal rainfall and increased minimum support prices for crops.
“Our outlook is very positive for the rest of the year and given the way the government is investing in improving road infrastructure across the country, it will be good for the auto industry. Crude prices though should not move fast as it affects customer sentiment,” according to SIAM’s Wadhera.