Rural economy jitters hit auto sales in May

Domestic auto sales dropped 0.6 per cent to 16.83 lakh units in May 2015 compared to 16.9 lakh units in May 2014, hurt by distress in rural economy and a drop in sales of two-wheelers, three-wheelers and light commercial vehicles, according to figures released by Society of Indian Automobile Manufactures (SIAM).

However, passenger vehicles registered a growth of 4.67 per cent to 2.17 lakh units in May from 2.08 lakh units in the year-ago period. Passenger cars jumped 7.73 per cent in May 2015 to 160,067 units from 148,577 units sold last year. In April, domestic sales of passenger cars grew 18 per cent year-on-year.

Among other categories in the passenger vehicle segment, utility vehicles and vans declined 2.27 per cent and 5.06 per cent respectively in May 2014 compared to May 2014.

The much-talked about rural distress seems to be reflecting in the two-wheeler sales as domestic sales dropped 1.25 per cent to 13.80 lakh units in May from 13.98 lakh units last year during the same period.

Motorcycles sales declined 3 per cent to 9.53 lakh units from 9.83 lakh units in the corresponding period last year. Sales of up 75-110 cc motorcycles, known to be sold mostly in the rural markets, fell to 7.07 lakh units from 7.51 lakh units a year-ago.

However, scooter and scooterette sales grew 2.61 per cent to 3.64 lakh units from 3.54 units last year.

Light commercial vehicles sales dropped 7 per cent, with goods carriers registering a drop of 8.67 per cent to 23,504 units compared to 25,736 units last year. Passenger carriers registered a 1 per cent year-on-year (y-o-y) growth in sales during the month. Three-wheeler sales also declined 10 per cent y-o-y during the month.

However, medium and heavy commercial vehicle sales jumped 25 per cent during the month as both passenger and goods carriers registered over 20 per cent growth during the month.

According to SIAM, auto sales have been a mixed bag in May. "The slowdown in rural economy is reflected in the sales figure. Though passenger car sales have recovered, but we don't know yet how sustainable this recovery is," said Vishnu Mathur, director general, SIAM.

Exports grew 4 per cent with passenger vehicles overseas sales registering a growth of 7.5 per cent. Passenger car exports grew at 8.23 per cent. Two- wheeler exports dropped 1 per cent y-o-y in May, even as scooter exports jumped 36 per cent. Motorcycle exports dropped 3 per cent in May.