FY2017 Ends On A Positive Note: Passenger Vehicle Sales Cross 3 Million

The overall sales numbers of the Indian automotive industry, for the month of March 2017 are out. And the Society of Indian Automobile Manufacturers (SIAM) insists that FY2017 has ended on a positive note, with over 3 million passenger vehicles sold during the course of the years. This is the first time that the passenger vehicles segment has sold over 3 million units in a financial year. In total, the industry sold 25,316,044 units in April-March 2017 recording a growth of 5.41 per cent over the sales of FY2016, which stood at 24,016,599 units.

Passenger Vehicle Sales:

As we mentioned earlier, for the first time ever, the total sales of passenger vehicles crossed the 3 million mark. And if we consider the sales of passenger vehicles for the month of March, it is a positive story as well. The overall sale for passenger vehicles in March 2017 was 282,519 units as compared to 256,920 units, growing by 9.96 per cent. As usual, the utility vehicles were the biggest contributors with sales of 77,689 units showing a growth of almost 21 per cent over sales in March 2016.

As a trend, SIAM has observed that the categories of sedan and small SUVs (read compact SUVs) have started overlapping in India and this makes the buying decision for an individual/family slightly more complicated, in a good way. SIAM also added that the Indian automotive market is one of the most competitive and a dynamic market across the world.

Two Wheeler Sales:

The two-wheeler sales for March 2017 were sort of a mixed bag. The scooter sales grew by 8.13 per cent selling 486,604 units while the motorcycle sales dipped by 3.33 per cent, selling 915,999 units, when compared to the sales of March 2016. This happened despite the fact that on the last two days of March 2017, almost all major two-wheeler manufacturers happened to offer massive discounts in a bid to clear out the remaining BS III stocks. SIAM estimates that the two-wheeler manufacturers sustained a loss of Rs. 1,200 crore on account of the discounts given to clear out the BS III stocks. This particular segment grew by 6.89 per cent in April, 2016-March, 2017 over the same time in the last fiscal.

Speaking about BS III vehicles stocks, SIAM believes that India still has Rs. 5,000 crore worth of BS III stock left, most of it is commercial vehicles. As usual, Hero was the top dog and maintained its Numero Uno status as the biggest two-wheeler maker in India for FY17. Honda and TVS were the second and third largest manufacturers respectively.

Commercial Vehicle Sales:

The combined sales of medium & heavy commercial vehicles and light commercial vehicles also grew by 9.26 per cent with 87,257 units sold in March 2017. The commercial vehicles were the other segment to have been hit hard by Supreme Court's ban on sales and registration of BS III vehicles from 1 April, 2017.

The medium & heavy commercial vehicles grew by 5.97 per cent over March 2016. Similarly the LCVs grew by a decent 12.11 per cent over March 2016. The goods carriers were the major contributors with 40,622 units sold. The total sales of LCVs in March 2017 was 47,904 units.

Three Wheeler Sales:

The three-wheeler segment had the worst performance in FY2017. The segment declined by 4.93 per cent. The passenger carriers were the worst-off with a decline of 8.83 per cent while the goods carriers grew by 12.75 per cent for FY 2017 when compared to FY16. If we have look at the sales of three wheelers for the month of March 2017, the passenger carriers declined by 31.88 per cent while the sales of the goods carriers grew by 10.45 per cent, selling 10,890 vehicles.

On the whole, it would be safe to say that the financial year of April 2016-March 2017 did bring cheers to the Indian Automotive industry despite setbacks such as the government's demonetisation drive and the Supreme Court's ban on BS III vehicles.