First signs of excise duty reduction; markets shows signs of growth

In what could be an effect of the reduction in excise duty, the Indian auto market, and passenger vehicles especially, showed some signs of growth in February 2014 compared to the corresponding month last year. Yet it may be too early to predict the real, and complete effect of the excise duty reduction on automobiles. The industry produced atotal 1,811,276 vehicles including passenger vehicles, commercial vehicles, three wheelers and two wheelers in February 2014 as against 1,734,851 in February 2013, registering a growth of 4.41 per cent over the same month last year. The growth continues to be on account of growth in two wheelers production. The overall domestic sales during April-February 2014 grew marginally by 2.68 per cent over the same period last year because of growth in Scooters and motorcycles sales. The sales of Passenger Vehicles declined by (-) 5.91 per cent during April-February 2014 over the same period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicles and Vans dropped by (-) 4.60 per cent, (-) 5.02 per cent and (-) 18.30 per cent respectively during April-February 2014 compared to the same period last year. The overall Commercial Vehicles segment registered a de-growth of (-) 19.71 per cent in April-February 2014 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) registered negative growth at (-) 25.89 per cent and Light Commercial Vehicles also dropped by (-) 16.56 per cent.

Three Wheelers sales declined by (-) 11.33 per cent in April-February 2014 over the same period last year. Passenger Carriers and Goods Carriers declined by (-) 13.03 per cent and (-) 3.49 per cent respectively in April-February 2014 over April-February 2013. Two Wheelers sales registered growth of 6.11 per cent during April-February 2014 over April-February 2013. Within the Two Wheelers segment, Scooters and Motorcycles grew at 21.43 per cent and 2.88 per cent respectively, while Mopeds declined by (-) 9.16 per cent in April-February 2014 over April-February 2013. During April-February 2014, overall automobile exports grew by 6.39 per cent. Passenger Vehicles, Three Wheelers and Two Wheelers registered growth at 6.44 per cent 16.40 per cent and 5.41 per cent respectively, while Commercial Vehicles declined by (-) 8.12 per cent during April-February 2014 compared to the same period last year.