While CV and car sales showed strong growth in May 2018, there was a slowdown in 2W and UV sales, says India Ratings report
Mumbai, July 2, 2018
In May 2018, the automobile industry’s sales volume increased 12 per cent yoy, primarily led by strong growth in MHCV volumes, according to an India Ratings and Research (Ind-Ra) report, which highlighted the trends in the sub-segments of the auto sector, including passenger vehicles (PVs), commercial vehicles (CVs) and two-wheelers (2Ws).
During the period, CV sales continued to register strong growth at 43 per cent (57 per cent yoy for YTD May 2018). However, the growth rate moderated on a month-on-month basis. During April-May 2017, CV sales volume declined due to the transition to BS-IV emission norms from BS-III, which led to significant pre-buying in March 2017 and inadequate supply of BS-IV-compliant vehicles. As a result, MHCV sales volume grew 80 per cent yoy in May 2018 (115 per cent yoy for YTD May 2018). The industry’s sales volume growth continued to be supported by an uptick in the industrial activity and infrastructure development.
LCV sales volume registered double-digit growth (up 26 per cent yoy) for May 2018, driven by demand from consumption-driven and e-commerce sectors. The PV segment registered robust 20 per cent yoy sales volume growth for May 2018. During the month, car sales increased 20 per cent yoy, surpassing UV sales growth of 18 per cent yoy for the first time since May 2017. Car sales picked up due to new product launches.
In May 2018, 2W sales volume growth slowed to single digit for the first time since November 2017, primarily due to a decline in scooter sales. However, motorcycle sales increased 15 per cent yoy in May 2018, with Hero Motocorp Ltd. and Bajaj Auto Ltd expanding their related market share. 2W sales are usually weak during the monsoon season (May-July). Thus 2W sales volume also declined 4 per cent mom. Nevertheless, Ind-Ra expects double-digit 2W sales growth in FY19 on account of strong rural demand.