Beating two straight years of decline, domestic passenger car sales grew by 5% in 2014-15 though the figure is still lower than the peak sales achieved in 2010-11.
Sales stood at around 1.88 million units in 2014-15, against 1.79 million units in 2013-14 when sales had declined 5.6% over 2012-13.
Sale of utility vehicles and sports utility vehicles also grew 5.3% to around 0.55 million units in 2014-15 after tumbling in the previous fiscal.
“We have still not reached the peak level so there is sluggishness in demand. But the growth over last fiscal is a positive thing,” said said Vishnu Mathur, director general, Society of Indian Automobile Manufacturers (SIAM), the industry body that collates sales data.
“During the fiscal, general sentiment improved in the car industry. Investment cycles restarted and people’s concerns were greatly diminished.”
In a departure from the routine, SIAM did not give out a forecast for 2015-16, but expressed hope that it would be better than 2014-15.
“Interest rates have not changed much. We hope the Reserve Bank will cut rates this fiscal, and banks will pass it on to the consumers,” said S Sandilya, group chairman, Eicher Motors.
Total vehicle sales across categories grew 7.22% at 19.75 million units from 18.42 million units in 2013-14. Two-wheeler sales grew a little over 8% with scooters again growing faster than motorcycles.
However, commercial vehicle sales fell again, by 2.83% this time.
But a turnaround in the demand for heavy trucks and buses was a cause for optimism.
“Sale of heavy commercial vehicles is an indicator of the overall economy and the turnaround means things are moving at some level,” Mathur said.
“Demand for motorcycles has softened largely due to the unseasonal rains in the last few months that have impacted farm incomes,” he said.