Auto sector coming out of demonetisation blues

Automobile sales for the month of February 2017 have depicted declining effect of demonetisation. The note ban decision in November had affected overall demand across the sector, thereby affecting the sales of automobile companies. The February sales data illustrates that the industry is recovering from the lows in previous months
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Maruti Suzuki, the country’s largest car maker, saw 11 per cent increase in sales at 130,280 units in February as against 117,451 units in the same month previous year. The rise in sales was driven by strong sales in the UV segment. Hyundai Motors and Renault India also posted positive sales growth of 6 per cent and 26 per cent, respectively. However, Mahindra and Mahindra Ltd. posted degrowth of 3 per cent at 42714 units, mainly because of drop in sales of utility vehicles.

In commercial vehicle segment, SML Isuzu posted 13.4 per cent growth, indicating improvement in the industrial sentiment post demonetisation. Another commercial vehicle segment major, Ashok Leyland, sold a total of 14,067 units in Feb 2017 as compared to 13,406 units in Feb 2016, posting 5 per cent growth.

Overall sales figures indicate that the industry is coming out of the demonetisation blues, mainly driven by strong domestic demand