The Indian automobile industry saw little cheer last month as the two-wheeler industry continued to de-grow and passenger car sales went flat with barely 2% growth. According to official figures, passenger car sales grew by a little over 2% to 94,756 units in February’08 as compared to 92,618 units in February’07. Passenger vehicles, on the other hand, which include utility vehicles, cars and multi-utility vehicles, grew 7.8%, clocking 1.25 lakh units.
I have a talk with two or three prominent industry players and they are not too worried about it at the moment. According to them, February sales figures are not the true indicators for the car industry’s growth as most customers and manufacturers postpone their plans and wait for the budget announcements. The car industry can easily see a 10% CAGR in the next 4-5 years. In my opinion, there could be slow growth period for the car industry but in the long run it is poised for good growth.
It’s tough time for motorcycle makers particularly as motorcycles sales were down by over 17% selling 4.25 lakh units in Feb’08. However the main issue with the motorcycle industry is the lack of enough retail finance options in the market, which is deterring customers to buy motorcycles. Despite lowering of excise duty I see very less positive impact on motorcycle sales figures till ample retail finance options are available.
Scooters and scooterettes were the only category in the two-wheeler space that saw minor growth clocking 83,256 units in Feb’08 as compared to 82,944 units in Feb’07. Total two-wheeler sales recorded a de-growth of -8.58% in April-February ‘08 as compared to same period last year.
Commercial vehicles also recorded slight upturn in sales with total commercial vehicles up by a little less than 2%. Light Commercial vehicles clocked 18,760 units in Feb’08 as compared to 18,388 units in Feb’07. Total commercial vehicles recorded a growth of a little less than 3% in April-Feb’08 over the same period last year.