Despite demonetisation, ban on diesel cars in NCR and uncertainty over emission norms, India witnessed record car sales of 3,046,727 units in 2016/17. It is a consequence of a splendid 30 per cent growth of utility vehicles, largely led by new models such as Hyundai Creta, Maruti Brezza and Innova Crysta. The Society of Indian Automobile Manufacturers (SIAM) released the sales data and projected a much higher growth in 2017/18.
"We are projecting a 7-9 per cent growth in 2017/18 on better fiscal payouts and higher agri incomes. Also, the clarity over BS-4 emission norms and GST implementation will pave the way for higher sales," Vishnu Mathur, Director General of SIAM told the media. SIAM is expecting to inch closer to Germany in terms of car sales, which sold a 3,351,607 units in 2016 and is the fourth largest passenger car market in the world.
Similar sentiments were echoed by analysts tracking the sector. Abdul Majeed, Partner at Price Waterhouse, says that Indian automotive industry has performed extremely well in the last fiscal. "In the passenger car segment, OEMs with new launches and a fantastic distribution network across the country, continue to grow. The commercial vehicles and two-wheeler vehicle segments saw a boost due to the implementation of BS IV norms from April 1, 2017. We no longer see the impact of demonetisation," he said, adding that the introduction of GST from July 1, 2017, will boost consumption. The overall GST rates on different segments of the automotive sector during the year are likely to be favourable -- it may bring down the prices of the vehicles and keep the growth momentum going in the fiscal.
Despite the bloom, the auto industry remained cautious on future growth because of a sharp increase in commodity prices on the back of increase in international raw material prices. Abrupt policy changes also continue to affect long term sustainable growth of the industry. On the fiscal front, the vehicle finance rates still remain high and a cause of worry for the industry, especially the two wheeler segment.
SIAM gave a positive outlook on growth. Passenger vehicles segment is expected to grow by 7 to 9 per cent, commercial vehicles segment in the range of 4 to 6 per cent, the crucial two wheelers segment by 9-11 per cent and the three-wheeler segment is expected to claw back into positive terrain with 4-6 per cent gain in 2017/18.
Major Highlights of the Year:
- Passenger vehicle sales crosses 3 million mark
- Record sales in passenger car and utility vehicle segments
- Record two-wheeler sales at 17.6 million
- Record sales in scooters, mopeds and motorcycles segments
- Record passenger vehicle exports. Growth again in double digits
- Record exports of cars and utility vehicles
- Record exports of commercial vehicles
- Record exports of scooters