Automobile sales speed up by 5-year-high of 7.87% in FY16
Car sales in India grew at the fastest pace in 5 years, up 7.87 per cent in 2015-16, driven largely by new model launches and heavy discounts in a “challenging environment”. According to Society of Indian Automobile Manufacturers (SIAM), domestic car sales stood at 20,25,479 units in 2015-16 as compared with 18,77,706 units in the 2014-15.
“The previous highest growth was achieved in 2010-11 when car sales grew by 29.08 per cent. The growth in 2015-16 was mainly because companies have tried to come up with new models, which have been accepted in the market,” SIAM Deputy Director General Sugato Sen told reporters here.
Moreover, many companies also gave heavy discounts and a lot of efforts were made by the manufacturers to induce purchase, he added. Sen said the growth in FY16 has been achieved amid a “challenging environment for the auto industry” such as persisting weak consumer sentiment due to high interest rates, ambiguity over diesel cars due to ‘adhoc policies’ and “intervention of courts complicating matters and stigmatising technologies”. “The sector is the highest taxed in manufacturing sector ... There is only 60 per cent capacity utilisation in the auto industry today,” he said, adding “the profitability of many car companies are still in the negative today in India”.