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Customer LoginsPassenger vehicle sales in India climb 11% y/y in April, with CV deliveries up 17.4% y/y
Introductions at the 2016 New York International Auto Show (NYIAS) are expected to include a notable focus on sports cars, as well as utility vehicles. In this report, IHS looks at the utilities and cars planned for the show.
IHS Automotive Perspective
- Significance: Passenger vehicle sales in India grew by 11% year on year (y/y) during April to 242,060 units, according to data from the Society of Indian Automobile Manufacturers (SIAM). Commercial vehicles (CVs) continued their strong showing, with dispatches up 17.4% y/y to 53,835 units during the month.
- Implications: April brought this year's first monthly y/y rise in Indian car sales. Yet their marginal 1.9% increase was overshadowed by a 42.8% surge for utility vehicles. This trend stems from urban consumption while soft demand in rural India has dented sales of A-segment cars.
- Outlook: Considering the challenging environment, IHS Automotive has kept its light-vehicle sales growth forecast for the market in 2016 unchanged at 7.4% y/y. We therefore expect the market to register sales of 3.38 million units.
Passenger vehicle sales in India grew by 11% year on year (y/y) during April to 242,060 units, according to data released by the Society of Indian Automobile Manufacturers (SIAM). Monthly volumes were led by sales of 162,566 cars, a rise of 1.9% y/y, while utility vehicle sales posted a 42.8% y/y surge to 62,170 units. Shipments of vans climbed 16.5% y/y to 17,324 units. Strong April sales lifted passenger vehicle sales during the first four months to a 4.5% y/y improvement to 965,172 units.
Commercial vehicles (CVs) also continued their strong showing with dispatches up 17.4% y/y to 53,835 units during the month. This was split between 23,515 medium and heavy commercial vehicles (MHCVs) (up 22% y/y) and 30,320 light commercial vehicles (LCVs) (up 14% y/y). Strong sales momentum for both categories lifted CV sales volumes by 19.4% y/y to 257,742 units in the first four months.
Total industry volumes (TIVs) during April rose 12.1% to 295,895 units. TIVs for the first four months of 2016 therefore gained 7.4% y/y to 1.22 million units. It is worth highlighting that the sales figures reported by the association represent dispatches by automakers to their dealers, rather than retail sales.
Production, exports growth slows
Vehicle production and exports during April largely mirrored the sales performance, albeit at slower rates. Passenger vehicle output grew 5.2% y/y to 301,520 units during the month, while CV production expanded 14.2% y/y to 65,710 units. Meanwhile, passenger vehicle exports rose 6.6% y/y in April to 53,651 units. However, CV exports during the month edged down 2.7% y/y to 6,826 units.
Outlook and implications
April's double-digit growth rate builds on the momentum gained in March and counters the weakness seen in the beginning of the year. More importantly, the month marked improved car sales for the first time this year. Yet the marginal increase of 1.9% is overshadowed by the 42.8% surge in utility vehicle sales. Sales figures for both Maruti Suzuki and Hyundai continue to be boosted by recently launched utility vehicles - the Vitara Brezza and Creta respectively. Their strong dispatches further point to the trend for compact crossovers to win buyers from premium hatchbacks and sedans. This alarming trend stems from urban consumption while soft demand in rural India has dented sales of A-segment cars. These inexpensive vehicles have made inroads in rural parts of the country but a poor monsoon for the last couple of years has kept demand under pressure. In the event of a better monsoon, which looks increasingly probable this year, sales of A-segment cars are likely to rise in the second-half of the year.
With only four of the top-10 automakers - Honda, Nissan, Toyota, and Volkswagen (VW) - posting lower y/y sales, April is easily one of the most balanced months in terms of OEM performance. Toyota is being hampered by the conditional ban on diesel vehicles in the national capital region (NCR). The Supreme Court's decision in December 2015 to stop registrations of diesel vehicles powered by engines above 2000 cc in the NCR and the subsequent extension of the ban has crippled sales of Toyota's Innova multipurpose vehicle and Fortuner sport utility vehicle.
Despite forecasts of better monsoon rains this year, challenges persist for the economy and therefore the auto industry. The central bank's decision to lower key lending rate by 25 basis points in early April is a welcome step, but it remains to be seen when the benefit will be passed on by commercial banks, which are battling high non-performing assets (NPAs). Meanwhile, a spike in oil prices could disrupt the central bank's policy of lowering interest rates and boosting demand. Considering this context, IHS Automotive has maintained its 7.4% forecast for light-vehicle sales growth for the market in 2016. As a result, we expect the market to register sales of 3.38 million units.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.