Passenger car sales in the domestic market declined year-on-year in May, after just one month of growth in April this calendar year, following a change in buying trend wherein some sedan customers moved to buying utility or compact sports utility vehicles (SUVs).

According to the latest data released by the Society of Indian Automobile Manufacturers (SIAM) on Thursday, passenger car sales fell around 1 per cent last month to 1.59 lakh units, compared with 1.60 lakh units in May 2015.

In this calendar year, April was the only month when car sales grew 1.87 per cent because of marriage season demand, Vishnu Mathur, Director-General, SIAM, told reporters here.

Beginning this year, passenger car sales dipped 0.72 per cent in January year-on-year (YoY), followed by -4.31 per cent and -0.30 per cent in February and March, respectively.

Sedan sales “Car sales were slightly negative last month as some of the sedan sales are getting transferred to the utility vehicle segment that saw launches of various compact SUVs,” Mathur said, adding that “rural demand had also come down in May for some companies, and that is a concern.”

Companies such as Maruti Suzuki India, Toyota Kirloskar Motor, Tata Motors and Ford India reported a decline in sales in May.

Mathur said whatever little growth in sales was seen was driven by urban demand, as the rural market continued to slow down, especially for small cars. In addition, the passenger car segment was also impacted by the shift from diesel to petrol cars, he said, adding that only a good monsoon may bring some cheer to automakers.

Utility vehicles such as Hyundai Creta, Maruti Vitara Brezza, and Mahindra TUV300 and KUV100, however, fuelled growth in the overall passenger vehicle segment, Mathur added.

In the two-wheeler segment, too, only scooter sales saw double-digit growth (25 per cent) during the month, mainly because of higher demand from the urban market. Motorcycle sales grew by around 10 per cent y-to-y to 15.15 lakh units compared with 13.81 lakh units in May last year, the SIAM report said.

Commercial vehicles (small, medium and heavy) are the only segment that’s growing constantly y-o-y for the past many months because of improvement in sectors such as infrastructure and mining, the report said.

“New models that meet customer expectations will certainly help automakers gain market share. Hopefully, the uncertainty relating to diesel vehicles will settle down soon. The government’s efforts to replace old vehicles should also help volumes to grow,” said Abdul Majeed, Partner at Price Waterhouse.

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