NEW DELHI: Car sales topped a record twenty lakh units in 2015 as new models and an improved buyer sentiment helped purchases. A full recovery is still some time away as companies hope for a stronger turnaround in the economy to aid volumes.
Car sales had been slow over the past few years and managed to show signs of improvement only after the entry of the BJP-led Modi government in May 2014 as it promised economic reforms and quicker decision-making.
And while the sentiments have improved, especially after central bank RBI eased interest rates by certain degrees and fuel prices softened, more needs to be done, say industry officials.
According to full-year numbers released by industry body Society of Indian Automobile Manufacturers (Siam), car sales in 2015 stood at 20.34 lakh units, a near 10% growth over the 18.52 lakh units sold in the previous year. This also bettered the previous high figure of 19.98 lakh units sold in 2012.
New models such as Marutis Baleno hatchback, Hyundais Creta SUV and Renault Kwid mini have helped improve the traffic at car dealerships. The efforts towards a revival have also been easier as companies threw in discounts to lure buyers.
Growth is fuelled by positive urban-customer sentiments, gradual up-tick in the economy and hope that the economy will do much better in the coming quarters, said auto-industry analyst Abdul Majeed, a partner at accounting firm Price Waterhouse. There are many positive indicators to support the growth compared to couple of negative indicators.
Sugato Sen, deputy director general of the industry body, said auto makers are concerned about continued weak demand in rural and semi-urban areas, where two years of insufficient monsoon rains have hurt agricultural activity and farmers incomes. Overall, though, performance in 2015 has exceeded our expectations, he said.
Motorcycle sales are already feeling the heat from the rural reversal as industry volumes declined to 105.23 lakh units in 2015 against 108.96 lakh units in the previous year. The category gets a big chunk of its volumes from the rural and smaller markets.
Scooter sales, however, bucked the trend as they were helped by a surge in demand in metros and bigger towns. Total scooter sales in the year increased from 43.20 lakh units in 2014 to 48.80 lakh units in the past year.
Another critical category that rode on the economic revival was commercial vehicles where sales were up 8% at 6.52 lakh units against 6.06 lakh units in 2014, Siam said.
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