10/04/2015 7:11 PM IST | Updated 15/07/2016 8:25 AM IST

Car Sales Rise In India, Ending Two Years Of Decline

SANJAY KANOJIA via Getty Images
To go with story 'India-economy-urbanisation' by Trudy HARRISIn this photograph taken on March 4, 2015 Indian commuters travel along a busy road during a traffic jam as there is no parking and traffic control system in the middle of the old city in Allahabad.Its roads are clogged with traffic, the pavements overflow with rubbish and power cuts are a fact of life. But Allahabad, an ancient settlement on the banks of the Ganges, is hoping to become one of India's first tech-savvy 'smart cities' under ambitious plans being piloted by Prime Minister Narendra Modi. AFP PHOTO / SANJAY KANOJIA (Photo credit should read Sanjay Kanojia/AFP/Getty Images)

NEW DELHI — Car sales in India rose by 4.99 per cent in 2014-15 after falling for two consecutive fiscals, as lower fuel prices and softening of interest rates led to reduction in the overall cost of ownership.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic car sales in FY15 stood at 18,76,017 units as compared to 17,86,826 units in the previous fiscal. In 2013-14, car sales in India had fallen by 4.65 per cent in the previous fiscal. In 2012-13, they had fallen by 6.69 per cent, which was the first decline in a decade.

"During FY15, general sentiment improved in the car industry. Investment cycles restarted and the worries which people were having was greatly diminished," SIAM Director General Vishnu Mathur told reporters here. Besides, interest rates and fuel rates came down during the last fiscal thereby reducing the overall cost of ownership, he added.

In FY15, the total vehicle sales across categories were up 7.22 per cent from 1,84,23,223 units in 2013-14 fiscal. Two wheeler sales did well during the fiscal, on account of scooters. Total sales were up 8.09 per cent for the 2014-15 fiscal at from 1,48,06,778 units in 2013-14.

Motorcycle sales for the fiscal ended March 31, were up 2.50 per cent to 107,43,549-units from 104,81,115 units in corresponding fiscal. "Motorcycle sales were impacted due to moderate demand from rural markets, which saw scant rainfall last year. Even now the rural markets have been impacted by unseasonal rains," Mathur said. Scooters however posted a robust growth of 25.06 per cent during FY15 compared to the same period in 2013-14.

Commercial vehicles, however, continued to reel under a prolonged slump, posting a decline of 2.83 per cent from 6,32,851 units in the earlier fiscal. "Sales of heavy trucks have gained traction due to start of various infrastructural activities like mining and construction of roads, while sales of light commercial vehicles have still not picked up," Mathur said.

On the export front, during 2014-15, car shipments fell by 1.66 per cent at 5,42,082 units compared with the previous fiscal. Overall auto exports from India grew by 14.89 per cent in FY15 over the same period in 2013-14.

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