The automobile industry in India has recorded exceptional growth in the last financial year. The statistics provided by manufacturers showed that the automobile sales figures were some of the best ever across segments of vehicles. The growth momentum is expected to continue in the upcoming fiscal as well. The improvement in economic activity only cements the fact that FY19 is likely be a great year for auto manufacturers.
The players in the industry indicated that the cumulative domestic vehicle sales grew by 13%-15%. This was the first time these figures hit the double-digit mark since FY12. Record growth was observed by the two-wheeler and three-wheeler segment. The commercial vehicle segment also witnessed double-digit growth. These figures are very encouraging as the growth was observed at a time when the industry has been battling the uncertainty introduced by the GST regime and the inclusion of new emission standards. The industry is also looking forward to significant expansion in the passenger vehicles segment in the financial year 2018-19.
Growth figures across segments
- The two-wheeler market in India has crossed the 20 million unit milestone with sales growth of 14%. The favourable monsoons and strong demand in the rural areas have leveraged the sales growth.
- The exports and domestic sales of three-wheelers contributed to a growth that exceeded 25%, touching sales figures of 1 million units.
- The segment of commercial vehicles has recorded sales of more than 8.8 lakh units in the financial year 2017-18. This accounted for a growth in sales figures by 23%. The medium and heavy vehicle segment recorded highest sales since FY12 as well. The introduction of the GST regime has resulted in several policy changes that have contributed to the encouraging sales figures for commercial vehicles.
- The passenger vehicle segment grew by 8%, selling 3.3 million units.
The improved automobile sales figures shows the pent-up demand for commercial vehicles and two-wheelers following disruptions in demand from demonetisation, new emission norms, and GST implementation.
India is the fifth largest market for passenger vehicles, according to data from the Organisation Internationale des Constructeurs d’Automobiles (OICA). The country has also overtaken China to reign as the largest motorcycle market. As far as commercial vehicles are concerned, India is the fifth largest market in the world.