UVs lead passenger vehicle revival in July, CVs under pressure still

by Mayank Dhingra 11 Aug 2020

The Society Of Indian Automobile Manufacturers (SIAM) – the unified body of major vehicle manufacturers in India – today announced the industry’s sales performance for July. While the market’s mood is muted still, there are some green shoots of recovery.

The passenger vehicle (PV) segment registered an overall year-on-year (YoY) decline of 3.86 percent in sales at 182,779 units (July 2019: 200,790). While this hints at a good and quick recovery of the segment, it also creates doubts over demand sustenance in the long-term.

According to Rajan Wadhera, president, SIAM, “After few consecutive of months of plummeted sales in a post-Covid scenario, there are signs of green shoots in PVs and two-wheelers, where the YoY de-growth is much lesser than the previous months. The sales numbers in the month of August would indicate if this is sustainable demand and not just a pent-up demand.”

From a month-on-month perspective, however, July seems to have fared much better compared to June 2020 when PV sales had dipped to 105,617 units, thus, marking a 73 percent growth. 
While the passenger vehicle segment has been in the red for all of FY2020, it is the utility vehicles (UVs) within PVs that have been leading the charge for the entire class of vehicles towards recovery and the situation is no different in July 2020 either. A market trend for the UV body style as well as strong demand for some of the new launches – primarily – Hyundai’s Creta – have propelled the category’s growth. In particular, the Creta has raced past the 65,000-unit bookings milestones since launch in March 2020 even in the prevalent subdued market environment.

With sales of 71,384 units in the month, UVs registered a 13.88 percent growth, making it the only sub-category in PVs to be in the green. Passenger cars, on the other hand, posted a 12 percent decline with overall sales of 102,773 units.

Motorcycles pick up pace
The pandemic has also given a huge thrust to personal mobility over public transportation and thus, two-wheelers tend to have benefited from the crisis, albeit only in terms of reaching the pre-Covid sales levels. Overall two-wheeler sales stood at 1,281,354 units (July 2019: 1,511,692), thus registering a 15 percent YoY de-growth. 

Within two-wheelers, while the scooters continued to remain weak performers registering 36 percent de-growth with sales of 334,288 units, the motorcycles sales at 888,520 units, slowed down their rate of decline and narrowed it to 5 percent compared to last year’s sales. 

Clearly, a good monsoon has brought a fresh wave of demand from the rural clusters, thus, giving a reviving push to the two-wheeler segment in totality. With respect to June 2020 sales numbers, the performance marks a 26 percent month-on-month improvement where sales in the previous month stood at 1,013,431 units. 

CVs and three-wheelers down
Although the PV and two-wheeler segments are showing signs of revival, it is the commercial vehicles (CVs) that are the barometer of the economy. Given the current state of the pandemic in the country with intermittent lock-downs still arising in various states, the economy remains far from getting back to its shape. While SIAM did not reveal the sales performance of the CV segment for the month of July, CVs registered an 85 percent de-growth in the Q1 of FY2021 between April and June 2020 with overall sales of 31,636 units (Q1 FY2020: 208,310).

Three-wheelers at 12,782 units have registered a 77 percent decline (July 2019: 55,719). Within three-wheelers, passenger carriers were down 86 percent, while goods carried registered a 30 percent de-growth in the month.

magazine image

Latest Auto industry updates and news articles