Passenger Vehicle Sales To Touch 3 Million

The cash crunch from demonetisation and the ban on diesel vehicles of certain categories prevented the auto industry from achieving its goal of three million passenger vehicles sales last year.

But an improvement in February car sales has revived the industry's hopes of reaching that target in 2017.

The country’s largest carmaker Maruti Suzuki saw a growth of 11.7 per cent at 120,735 units in February 2017 while second largest player Hyundai Motor saw sales increase 4 per cent to 42,327 units when compared with the figure in the same month last year.

Honda Cars made a comeback on the back of its new launch, the upgraded version of its City model, and reported 9.4 per cent growth in sales during February. Toyota Kirloskar Motor total sales grew at 11,543 units during the month against 10,312 units in February 2016. Tata Motors, backed by new launches — Hexa and Tiago — recorded sales of 12,272 units in February, 12 per cent up compared with 10,962 units in same month last year.

Post-demonetisation, sales of passenger vehicles took a hit in the domestic market. In November 2106, passenger vehicle sales grew only by about 1.82 per cent compared to the corresponding month last year. In December, passenger vehicle sales declined first time in the current fiscal by 1.36 per cent to 227,824 units from 230,959 units in the year-ago month.

Not just demonetisation, the ban on diesel vehicles with engines above 2,000 cc in Delhi NCR and few other states also impacted sales, especially those of Toyota, Mahindra and luxury carmakers.

For the first nine months of the current financial year 2016-17, total passenger vehicle sales stood at 2,243,525, a growth of 8.59 per cent. A simple calculation says the 3 million mark is short by 756,475 units. A 14.4 per cent sales growth to 265,000 lakh units in January, 2017 and double digit growth by manufactures in February indicates March will be left with 250,00-280,000 units to breach the 3 million mark, and by all means it is achievable.

Credit Rating firm ICRA expects passenger vehicles sales to end fiscal 2017 with a 10 per cent growth over the last year. During the entire financial year 2015-16, 27,89,678 passenger vehicles were sold in the domestic market.