Car sales remain on the rise in July; scooters overtake motorbikes

Car sales in India continued to show a rising trend for a third month in a row in July, indicating a recovery in this financial year after two consecutive years of downturn.

Sales have rebounded on the back of discounts offered by manufacturers and positive sentiment after the Narendra Modi-led NDA government took over.

A lowering of excise duty also helped the turnaround.

According to July sales figures released by the Society of Indian Automobile Manufacturers (SIAM), car sales saw a 5-per cent growth in volumes, led by Maruti Suzuki, Hyundai and Honda Motor Co.

The turnaround in buyer sentiment has seen a rise in footfalls at showrooms. However, companies are still forced to offer attractive discounts to maintain the excitement.

Overall, passenger vehicle sales rose 7 per cent in July as car volumes were aided by healthy demand in utility vehicles space. Cars like Honda's Mobilio and Ford's Eco Sport witnessed good demand.

 Sugato Sen, deputy director-general of SIAM, said unlike in the past, recovery has been slow and painful this time.

"We just hope that this will be sustainable. Also, the worry is that not all companies have been able to record positive numbers," he said.

Sen said the industry may record positive numbers in 2014-15 if the feel-good sentiment continues, especially during the festive season towards the end of the year.

Scooters back in demand
On the two-wheeler front, sales of scooters continued to be strong as the segment recorded a 37 per cent growth in July at 3.72 lakh units against 2.71 units in the same month last year.

Companies like Honda Motorcycles, Scooter India and Hero MotoCorp have been witnessing strong demand.

On the motorcycles front, sales grew a more modest 6 per cent at 8.6 lakh units against 8 lakh units in July last year. (See: Honda to set up world's biggest scooter plant in Ahmedabad).

Commercial vehicles still down
Commercial vehicle sales continued to suffer from the economic slowdown as volumes were down 14 per cent at 47,765 units in July against 55,310 units in the month last year.

Overall, the domestic industry's volumes were up 12 per cent in July at 15.9 lakh units against 14.1 lakh units in the corresponding month last year.

There was some cheer o the exports front, as volumes were up 32 per cent at 3.2 lakh units.