Pune: The automobile market has managed to register a positive growth in the first half (H1) of the Financial Year (FY) 2017-18, despite the paradigm shift in government policies and the taxation structure in the country in the past one year.
Though some companies saw red at the beginning of the FY 2017-18, the festive season provided the much-needed fillip in terms of sales during September.
Be it production, sales of two-wheelers and four-wheelers within the country, export of two-wheelers and four-wheelers, the automobile market has managed to surpass expectations and effectively bear the shocks of demonetisation, the introduction of Goods and Services Tax (GST) and other policy reforms such as a ban on the sale of BS III vehicles.
A study by the Society of Indian Automobile Manufacturers (SIAM) on the market performance between April and August 2017 has shown positive growth in most sectors. “The industry produced over 1.19 crore vehicles, including passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycle, in April-August 2017 as against over 1.09 crore in April-August 2016, registering a growth of 9.44 per cent,” the report said.
The SIAM stated that domestic sale of passenger vehicles grew by 8.67 per cent in April-August 2017 as compared to the same period last year.
“The overall commercial vehicles segment grew by 1.58 per cent during April-August 2017 as compared to the same period last year. Medium and heavy commercial vehicles (M&HCVs) declined by 13.60 per cent. However, light commercial vehicles (LCV) grew by 12.37 per cent,” the report stated.
The report added that three-wheeler sales declined by 16.26 per cent while two-wheeler sales registered a growth of 10.41 per cent,” the report stated.
In terms of exports, the report said, “During April-August 2017, overall automobile exports grew by 10.27 per cent. While passenger vehicles, three-wheelers and two-wheelers registered a growth of 2.62 per cent, 17.27 per cent and 13.82 per cent, respectively. Commercial vehicle exports declined by 33.08 per cent during this period.”
The current FY commenced on a positive note for Hero MotoCorp as the company clocked its best-ever dispatch sales during the April-June period with 18.53 lakh units and then registered sales of 6.78 lakh units in August, the fourth consecutive month of six-lakh-plus dispatch sales for Hero MotoCorp. This was followed by a new record as the company managed to set a new global benchmark in the two-wheeler industry, surpassing the seven lakh sales mark in September.
“Riding on robust demand for its range of two-wheelers, the company registered its highest-ever sales for any month, dispatching over 7.20 lakh units in September 2017. This record number has been achieved on a huge base of the corresponding month in the previous year when the company had sold over 6.74 units,” officials said.
Head of Sales, Marketing and Customer Care, Hero MotoCorp, Ashok Bhasin said, “With close to three weeks still remaining in the festival season, we have set an all-time record by selling over a million motorcycles and scooters in domestic retail sales in the festive period so far, further consolidating our market leadership.”
However, Bajaj Auto Ltd saw a red in domestic sales in H1 of this FY. “The domestic sale of motorcycles as well as commercial vehicles saw a 10 per cent and 8 per cent drop, respectively, in H1 of FY 2017-18. However, exports in both segments grew, clocking a seven per cent growth over last year in the motorcycles segment and 20 per cent in the commercial vehicles segment,” said officials from Bajaj Auto Ltd.
They added that the company saw the highest ever sales for one month in September. “The domestic motorcycle segment saw a growth of seven per cent as compared to September 2016. The exports saw a growth of 20 per cent over last year. Likewise, we saw the highest ever domestic sales of commercial vehicles in September 2017, with sales of 34,361 units, a 37 per cent growth over last September. The exports of commercial vehicles, too, grew by 25 per cent this September as compared to September 2016,” they stated.
Meanwhile, in the four-wheeler segment, Toyota Kirloskar Motor sold a total of 12,335 units in the domestic market this month registering a two per cent growth as compared to same period last year.
According to officials, the festive season has brought a positive spur in the customer buying sentiment. “Customer orders continue to be strong despite the price hike of products in line with cess hike this month. New Fortuner has seen overwhelming customer demand even after the impact of price rise and after a year of its launch,” they stated.
Commenting on the monthly sales, Director and Sr. Vice President, Sales and Marketing, Toyota Kirloskar Motor, N Raja said, “We revised the price of our products on September 12, 2017, in line with the cess hike which nearly reflects the prices in the pre-GST scenario. We are happy that our customer demand had the minimum impact of the cess hike and the festive season has ushered in a positive growth in the domestic sales. Despite the spike in customer demand, we had to close the month early by September 28, leading to lesser number of production days.”
He also said the company expects the growth momentum to continue into the coming months.