Indian auto industry crosses domestic sales of 20 million units for the first time

by Shobha Mathur , 12 Apr 2016


The Indian automobile industry has crossed the important milestone of notching domestic sales of over 20 million units for the first time ever. That’s not all.

Some other firsts to the Indian automotive industry's credit in FY2015-16 are achieving the highest vehicle production (2,39,60,940 units) and export (36,41,546 units) numbers over the last six years. 

In FY’16, total domestic sales reached 20,469,385 units, posting a growth of 3.78 percent over the previous fiscal. Utility vehicle (UV) sales were also the highest in 2015-16 since 2011-12 when they accounted for 553,662 units. In 2013-14, UVs contributed 525,839 unit sales, in 2014-15 they constituted 552,135 units and in 2015-16, they comprised 586,664 units.

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However, Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers of India (SIAM), was guarded in his response and told Autocar Professional that while the industry has crossed the 20-million mark in terms of domestic sales in FY’16, it has recorded low, single-digit growth rate of 3.78 percent over the previous fiscal’s total of 19,724,371 units, which is only 745,014 units more. 

“When the industry is tuned to growing between 15-20 percent on an annual basis, low single- digit growth is not very good,” he adds. “If every year the industry grows around 2 percent, then in the next 20 years, it would have crossed several milestones but that is not to say it is on a high growth trajectory.”

While the industry is still to pick up momentum after the slowdown that has bogged down the global markets and India for the last few years, compared to many global markets like China where growth has comparatively slowed down, India is still in the fast lane.

Fiscal year 2016-17 is expected to be better in terms of overall performance as the auto sector consolidates on the gains of FY’16 and builds further. A number of new model launches and refreshes planned by carmakers should see more action at ground zero. MPVs and UVs are also expected to capitalise on this upturn as the rural markets rally after a decline pushing the sales graph ahead. Further, with the Met forecasting a regular monsoon, demand for mass-market commuter motorcycles as well as last-mile small commercial vehicle is likely to grow.

Illustration courtesy: Valeo

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