Indian Auto Industry Witnesses Growth In May 2016

Indian auto industry saw a stable growth in the month of May 2016, which is a good number for the second consecutive month for this fiscal.

Maruti led the race with sales of 123,034 units sales (domestic 113,162 units and exports of 9,872 units) when compared to previous years sales of 114,825 units (domestic 102,359 units, exports 12,466 units) in the month of May 2015.

Maruti's bread and butter models like Alto and WagonR from the small cars and DZire Tour from the compact sedan were low in the domestic market compared to the sales of units in May 2015. The small cars were mainly dented due to rising sales of the Renault Kwid, which is growing by the day.

However, Maruti got its dividend from sales of the compact segment which include Swift, Ritz, Celerio, Baleno, and DZire, also the mid-size Ciaz, utility vehicles like Gypsy, Ertiga, S-Cross, Vitara Brezza and vans like Omni and Eeco contributed to the higher sales for Maruti.

The second largest car manufacturer, Hyundai saw growth too, posted sales of 41,351 units in May 2016 from 37,450 units sold in the month of May 2015.

"Fitch Ratings' FY17 outlook for the Indian automobile segment is stable, underpinned by the lower costs of owning a vehicle, which in turn is driven by new model launches and still low fuel costs," Nandini Vijayaraghavan, Director, Corporate, Fitch Ratings told IANS.

"The salary hike of around 23.5 per cent announced for government employees effective calendar year 2016 will provide a one-time fillip to automobile demand. The competitive environment in the passenger vehicle and two-wheeler segments will intensify on account of new product launches," Vijayaraghavan added.

Mahindra & Mahindra too saw growth, which sold 40,656 units this May when compared to 36,706 units sold in May 2015. "The favourable monsoon projections will definitely lead to improved buyer sentiment that will likely bring buoyancy in overall demand across all segments of the automotive industry. Going forward, we expect our wider product portfolio will drive our growth," said the company's President and Chief Executive (Automotive) Pravin Shah.

Ford India sold 17,279 units from 11,714 units in the corresponding month last year, which included both domestic and exports, mainly fueled by sales of its EcoSport.

Even the two-wheeler manufacturer saw some growth with Hero MotoCorp Ltd. reporting sales of 583,117 units compared to 569,876 units sold in May 2015. Honda Motorcycle & Scooter India Ltd clocked 436,358 units last month, which was up from 367,167 units sold in May 2015.

TVS Motor Company Ltd. grew at 11 percent in terms of sales, sold 243,783 units as against 220,079 units sold in May 2015.