Poor demand to drag down growth in passenger vehicle sales to a dismal 3 per cent in FY19
NEW DELHI: Owing to poor demand since July 2018, domestic passenger vehicle (PV) sales will be able to register a growth of only 3 per cent in the current financial year (FY19), way below the 7.89 per cent growth in FY18 over FY17 sales.
Data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday said that PV sales declined 1.11 per cent to 2,72,284 units in February 2019 from 2,75,346 units in the same month in 2018. In the April-February period (11 months) of this fiscal, PV sales have grown by only 3.27 per cent at 30,85,640 units as against 29,87,859 units in the same period a year ago.
The decline in February sales is the seventh such instance in the last eight months. According to SIAM director general Vishnu Mathur, people are postponing discretionary spends like buying cars ahead of the elections. This, coupled with the current subdued market sentiment, it is unlikely that March sales will be high.
Mathur explained that the sentiment continues to remain subdued because of high interest rates and high insurance premiums. On the near-term outlook, he said they expected to see some improvement before the end of the calendar year, but they are not certain as to how the situation will pan out over the next couple of election-dominated months.
The subdued sentiment is not only seen in the PV market, but also in the volume-generating two-wheeler segment and industrial activity indicator Commercial Vehicle (CV) segment.While the total two-wheeler sales in February were down 4.22 per cent to 16,15,071 units compared to 16,86,180 units in the year-ago month, the CV sales were down 0.43 per cent to 87,436 units in February, SIAM said.
Vehicle sales across categories registered a decline of 3.65 per cent to 20,34,768 units from 21,11,804 units in February 2018.