High base rate to keep passenger vehicle sales figures down, however, significant growth momentum in the segment may cushion decline in sales figures.
Passenger vehicle (PV) sales are unlikely to show any significant growth in numbers in June, ie sales figures will remain flat, compared to the 14% growth posted in the same period last year due to high base rates. However, the significant growth of momentum in the segment, will help cushion the decline in the sales figures, a research report by Nomura dated June 26 has said.
The PV sales were up 14% in June 2014 on fears that the excise duty concessions on passenger vehicles will be wavered, which helped boost the sales books. The concessions were later extended till December 31 last year. On the basis of this higher base rate, the PV segment might witness slightly slower growth in June this year. However, after several months of a slump in auto sales, the segment has been recovering in the last few months, and the growth momentum is likely to have sustained in June, capping the fall in sales. Going ahead, most carmakers have a long list of new launches slated for the month of July – new car launches have garnered much enthusiasm in the last few months – demand for PVs is only likely to improve further on, a report by JM Financial.
| Cars |
Launch date |
| Volvo S60 T6 |
July 3 |
| New Honda Jazz |
July 8 |
| Hyundai Creta |
July 21 |
| Maruti Suzuki S-cross |
Mid-July |
Nomura expects the country's biggest carmaker, Maruti Suzuki India Limited to grow by 3% in June 2015, significantly down from 34% in the same period last year based on higher base rate, while it expects Mahindra & Mahindra's PV segment's growth to fall by 0.2% in June 2015. Contrary to that, Nomura estiamates that Tata Motors see an up tick in its sales volumes by 27% in June 2015 year-on-year due to new car launches and lower base rate. Jaguar Land Rover is expected an 8.3% growth in sales figures. The report also adds that OEMs like Generam Motors and Ford might continue to be under the red line, however, Honda and Toyota might see single-digit decline on year.
Commercial & Heavy Vehicles segment
Medium and Heavy Vehicles are expected to witness growth in sales figures due to low base rate from last year. Nomura expects the segment to grow at 24%, with the growth led by higher tonnage (heavier than 25 tonnes) vehicles. The research firm expects Ashok Leyland's domestic volume to grow 37%, due to lower base rate and industry growth. Eicher, on the other hand, is expected to post a growth of 13% of its sales books in June, compared to the same period last year.
Two-wheeler segment
The two-wheeler segment is expected to show positive sales figures in June 2015 compared to the same period last year, aided by strong urban demand. However, the extent of growth will be capped by slowing demand from rural areas which will impact the entry-level motorcycle segment, a report from Motilal Oswal dated June 29 has said. According to the report, Bajaj Auto's two-wheeler segment is expected to grow by 11.6%, while while TVS Motors' motorcycle, scooters and moped segments may grow by 20, 7.5 and 3%, respectively. A timely start of monsoons is likely to boost two-wheeler growth in the rural segment, going ahead.
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