Auto Sales Hit Top Gear in June

Indian automakers picked up where they left off in May as auto sales hit top gear in June.

A healthy monsoon and rising rural demand pushed up sales of two-wheelers and tractors in the month gone by. Sales of domestic passenger vehicles and commercial vehicles were aided by rising demand in urban centres and the government's infrastructure push.

Passenger Vehicle Sales Rise

Maruti Suzuki reported a 45 percent growth in domestic sales led by strong demand for premium models including the 2018 Dzire, Swift and Baleno. M&M reported sales growth in every segment, with the utility vehicle segment (including pick-ups) growing a robust 23 percent, according to a note by brokerage Motilal Oswal.

Tata Motors posted a 63 percent growth in the passenger vehicles segment driven by strong demand for the Tiago, Tigor, Hexa and Nexon models. The combined production of Tiago and Tigor crossed the 200,000 unit-mark in the month. The recently-launched Nexon AMT witnessed good traction.

Commercial Vehicles Benefit From Lower Base

The commercial vehicles segment benefited from a lower base as truck sales were hit by the transition to stricter emission norms, Bharat Stage-IV, last year. The biggest surge was seen in the light commercial vehicles sub-category. Tata Motors and M&M both reported an over 50 percent growth in LCV sales. Bajaj Auto clocked its highest ever monthly sales in this segment.

Double-Digit Growth For Two-Wheelers

Overall, monthly sales of the Pune-based two wheeler company was the highest in more than eight years. Eicher Motors and TVS Motor both reported steady sales growth. Sales of Eicher's premium end 350cc and high engine bikes rose 29 percent. Domestic scooter sales for TVS Motor grew by 15 percent year-on-year. Hero MotoCorp's sales rose 13 percent in the same period.

Tractor Makers Expect Growth To Pick Up In Q3

A favourable monsoon across the country augurs well for tractor makers as sales increased in June.

Mahindra and Mahindra Ltd, the country's largest tractor manufacturer, reported a 24 percent rise in domestic tractor sales at 31,660 units. Escorts' domestic tractor sales in June increased 72.1 percent to 9,758 units.

Escorts, however, said the significant rise in sales was just a one-off.

June will not be the right month to compare (year-on-year) due to issues related to the implementation of the goods and services tax last year, Escorts Group Chief Financial Officer Bharat Madan told BloombergQuint in an interview. “The second quarter may be a flattish one for the industry, but third quarter will be very strong.”