Auto sales in May drive up with new launches, higher infra spending

NEW DELHI: Vehicle sales continued to grow at a quick pace, with overall volume expanding 12.13% in May with new launches, higher infrastructure expenditure and a favourable base effect helping boost the performance.

While the passenger vehicle segment comprising cars, SUVs and vans grew 19.65% in the past month to 301,238 units, riding on new launches from Honda and Toyota, commercial vehicle sales increased at a faster pace of 43.06% to 76,478 units, according to data released by the Society of Automobile Manufacturers Association (SIAM) on Monday. These are wholesale numbers as manufactures usually declare only shipments to dealerships and not retail sales.

Last year, sales were hit by the implementation of new emission rules and uncertainty over GST.


Manufacturers had offered heavy discounts on BS III models in last March, before the adoption of the next emission standard of BS VI from April 1. This boosted March numbers, especially in commercial vehicles and two-wheelers, but killed the numbers the following months. Also, expecting that the rollout of GST from July 1, 2017 would lower car prices, consumers had postponed purchases, which hurt sales in May and June last year, said Vishnu Mathur, directorgeneral of SIAM.

Mathur, however, expects industry performance to get stronger in the coming months. “Going forward, growth will pick up on the back of monsoon sales and infrastructure spending,” he said.

Sales of the newly launched Toyota Yaris and Honda Amaze, besides strong numbers from market leader Maruti Suzuki, added to the spike in passenger car numbers. Exports of passenger cars, however, declined 1.69% to 44,904 units.

Sales of utility vehicles rose 17.53% to 82,086 units. Exports outpaced sales — with shipments of 14,492 units, exports grew 21.23%.

In the two-wheeler space, the industry saw a reverse in trend, with scooter sales declining after around 15 months by 1.40% to 555,467 units in May. Overall two-wheeler sales, however, rose 9.19% to 1,850,093 in an indication of a shift in consumer preference back to motorcycles.

In the commercial vehicle space, medium and heavy commercial vehicles (M&HCVs) posted a massive 80% jump in sales at 30,128 units.

The light commercial vehicles segment grew 26.15% to 46,350 units in the past month.

ICRA sector head-corporate ratings Shamsher Dewan said the growth appeared secular across tonnage segments in commercial vehicles. Sectors like construction, automobile carriers, petroleum carriers and container traffic were driving demand, he said.

He attributed a 95% increase in medium and heavy truck sales to the low base. In the three-wheeler segment, exports remained the main driver, growing 70.32% to 46,243 units. Domestic sales also gained momentum with sales expanding 51.97% to 54,809 units.