Siam data shows that vehicle sales across categories, including commercial vehicles and two-wheelers, grew by 8.39 per cent to 23.73 million units in 2017.
It was an unusual December for automobile sales. Volumes of passenger vehicles - cars, vans and utility vehicles - which regularly steal the show in sales growth, were overshadowed by every other segment.
Commercial vehicles and two- and three-wheelers clocked sales growth in the high double digits against a 5 per cent growth in passenger vehicle sales.
Each of these segments had posted declines in December 2016 owing to demonetisation.
But the decline in passenger vehicle sales growth in December 2016 was just about 1 per cent against double-digit declines for medium and heavy commercial vehicles and two- and three-wheelers.
The low base played a role in growth during December 2017.
Domestic sales of passenger vehicles surpassed 3 million units in 2017, the first time in any calendar year, to 3.22 million vehicles.
The growth rate of 8.85 per cent over the 2.96 million units sold in 2016 is the highest in five years.
Sales had grown by 9.77 per cent in 2012. December passenger vehicle sales grew 5.22 per cent to 239,712 units.
Within the segment, sales of cars remained flat at a little over 158,300 units.
Utility vehicle sales grew by 15 per cent to 67,073 units and van sales grew at 31 per cent to 14,313 units.
Going by the financial year, the growth rate for passenger vehicles has been a little over 8 per cent to 2.42 million units.
SIAM has projected the segment’s sales growth at 9 per cent for 2017-18 against a previous forecast of 7-9 per cent.
The year 2017 was also a record volume year for the domestic two-wheeler market.
A record 19.17 million two-wheelers were sold last year, up 8.43 per cent from 17.68 million vehicles sold in 2016.
“In 2017, for the first time, more than 3.2 million passenger vehicles were sold in the domestic market. Last year also saw record sales of 19 million two-wheelers,” Sugato Sen, deputy director general at Siam, said.
Siam data shows that vehicle sales across categories, including commercial vehicles and two-wheelers, grew by 8.39 per cent to 23.73 million units in 2017.
While being bullish on passenger vehicles for the financial year, Siam has also made an upward revision in its projection for commercial vehicle sales growth to 13 per cent from 4-5 per cent earlier.
The forecast for two-wheelers is now 12 per cent compared to 9-11 per cent earlier. In 2016-17, passenger vehicle sales had grown by 9.23 per cent, commercial vehicle sales by 4.16 per cent and two-wheeler sales by 6.89 per cent.
Sen said the automobile industry had largely recovered from the demonetisation in 2017-18.
He, however, added that while some members were facing issues with regards to the goods and services tax, SIAM expected these to be settled by March.
Domestic sales of two-wheelers rose 41.45 per cent in December to 1.28 million units from 0.91 million units in the same month a year ago.
Within the segment, motorcycle sales last month rose 40.31 per cent to 788,156 units from 561,710 units in December 2016.
Scooter sales last month were at 432,429 units as against 284,405 units in December 2016, up 52.05 per cent.
Commercial vehicle sales expanded by 52.62 per cent to 82,362 units in December.
Within the segment, sales of medium and heavy commercial vehicles grew 73 per cent to 39,439 units and light commercial vehicle sales grew 37 per cent to 42,923 units.
Three-wheelers stole the show with a 90 per cent sales growth last month to 56,980 units.
Sridhar V, a partner at Grant Thornton India, said in spite of the low base of December 2016 one could not take away the fact that the sector had done well across segments, except passenger cars, and was on a growth path.
“This is expected to continue in the current quarter. A good monsoon, price discounts and new models are among the many reasons for the performance by the sector,” he added.
Photograph: Amit Dave/Reuters
