Automobile sales accelerate in 2016, but fall in Dec

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SME Times News Bureau | 11 Jan, 2017
The automobile sector sold a total of 21,901,572 units across segments and categories to record a growth of 9.17 per cent during 2016, however, the negative impact of demonetisation was seen in December's sales numbers, industry data showed on Tuesday.

The data furnished by the Society of Indian Automobile Manufacturers (SIAM) showed that total sales of passenger vehicles, which include cars, utility vehicles and vans, rose by 7.01 per cent to 2,966,637 units in 2016.

The industry data revealed that sales of overall commercial vehicles increased by 7.67 per cent. The segment is a key indicator of economic activity.

The commercial vehicles segment's off-take for 2016 was 702,640 units.

The three-wheelers segment sales rose 6.12 per cent to 545,732 units in 2016.

Overall, sales of two-wheelers, which include scooters, motorcycles and mopeds, increased by 9.70 per cent to 17,686,563 units.

In contrast, last month's sales numbers showed a very different picture with only the light commercial vehicles (LCV) segment showing a rise of 1.15 per cent.

The overall sales across all categories receded by 18.66 per cent to 1,221,929 units in December, while the total passenger vehicle sales declined by 1.36 per cent to 227,824 units.

The industry data pointed out that commercial vehicles' sales decreased by 5.06 per cent to 53,966 units.

The three-wheelers segment's off-take during the month under review plunged by 36.23 per cent to 29,904 units.

The two-wheelers sgement's sales last month dwindled by 22.04 per cent to 910,235 units.

Commenting on sales numbers of December 2016, Abdul Majeed, Partner with Price Waterhouse, said: "The automotive industry in general has been impacted due to demonetisation, particularly in rural areas and regions where cash transactions are typically very high."

"Players with high volumes in the passenger car segment have reported a decline. OEMs with low volumes and those that are riding on the demand for new models, which involve a waiting period, are relatively less impacted and some have even reported growth."

According to Sridhar V., Partner, Grant Thornton India, two-wheeler segment was most impacted in December 2016 due to demonetisation.

"One will have to hope that the demand in commercial vehicles and two-wheelers picks up in the next few months in lieu of the Bharat IV requirements from April 2017 to sustain the growth," Sridhar said.

"This will determine if the year can end with an often quoted double-digit growth. However, I would keep my fingers crossed," he added.