The Indian passenger car industry has seen a sales decline for the second consecutive month in February, as a host of factors like production loss due to the recent Jat agitation, selective ban on diesel SUVs and luxury cars in Delhi and cautious buyer sentiment ahead of the Budget, slowed down despatches.

According to sales data released by the Society of Indian Automobile Manufacturers (SIAM) today, passenger car sales in February fell 4.21% Y-o-Y to 164,469 units. This is the second decline after January when car sales fell 0.72%, after reporting 14 months of continuous growth. The recent dip in car sales points towards tough times ahead for the industry, and with the Budget levying additional taxes on passenger vehicles, the road to growth just got a little bumpier.

Even as car sales fell in the month, what saved the blushes for the passenger vehicle industry was a strong performance in the utility vehicle segment. UV sales in February rose 20.71% to 54,089 units, while van sales reported a growth of 13.26% to 15,596 units. As a result, overall PV sales remained in the positive territory with a growth of 1.68% to 234,154 units.

All other industry segments reported sales growth in February. The commercial vehicle, two-wheeler and three-wheeler segments posted positive numbers in the month, thus resulting in a healthy 11.76% rise in total automotive sales to over 17 lakh units.

Commercial vehicles continued on a good run, with M&HCVs leading the growth. The segment saw near-20% rise in sales at 62,359 units, with M&HCVs clocking a 34.32% rise to 29,035 units. Importantly, LCV sales also grew in the month to 33,324 units (+9.68%). The LCV segment is finally seeing growth come its way after a prolonged slowdown that has lasted for over two years. 

The big surprise came from the two-wheeler segment which clocked double-digit growth after many months, with a total sales of 13.62 lakh units. For a change, growth was driven by both scooters and motorcycles in February as the latter reported 11.05% growth in sales. Scooters continued to outperform with sales of 436,163 units (+17.71%).