MUMBAI: After a strong double digit growth of 14 per cent in October, the Indian automobile industry saw the growth moderating to 3.18 per cent to 1.65 million vehicles driven by companies resorting to inventory correction in line with the market demand, diwali holidays and production loss on account of Chennai floods.

While the passenger vehicle market grew by 11.40 per cent (2.36 lakh units) led by Diwali buying, sustained economic activity drove medium and heavy commercial vehicle sale to 24.75 per cent growth (20,145 units). While the light commercial vehicle segment is making a steady recover remaining flat at 31,621 units, the two wheeler market saw a significant correction at 1.47 per cent to 1.32 million units.

Industry players say retails were much higher in the personal buying space of cars and two wheeler and small commercial vehicle due to auspicious occasion of Diwali and Dhanteras.

With the passenger vehicle space, the car sales grew 10.39 per cent at 1.73 lakh units, the utility vehicle sales growth was impressive at 20 per cent driven new models Hyundai Creta and Mahindra TUV 300.

As for the two wheeler segment, the motorcycle sales grew at 1.58 per cent to 8.86 lakh units, whereas scooter sales grew just 2.45 per cent at 3.95 lakh units, much below 5.25 lakh units sales seen in October, clearly indicating inventory correction. The overall commercial vehicle sales grew at 8.56 per cent at 51,766 units.

Abdul Majeed – Partner at Price Waterhouse says the growth is not broad based. Some segments such as commercial vehicles are growing with potential uptick in the overall economic activity while other segments such as passenger vehicles are growing due to positive factors such as low interest rate, lower fuel prices including the pent up demand, OEM’s are playing their part with exciting launches at very attractive prices and deep discounts on some name plates. Two wheeler volume remains flat mainly due to lower off-take especially in the rural market.

“In order to have a sustained growth in the Indian automotive industry, it is absolutely necessary to have a robust growth in the overall economy which in turn depends lot more on the next level of reforms including introduction of GST,” added Majeed.

The sales numbers announced by automotive industry body – Society Of Indian Automobile Manufacturer’s Association are of despatch numbers – from factory to dealerships, which is different from direct sales to consumers.

The cumulative passenger vehicle sales for April to November grew 8.87 per cent, the commercial vehicle sales were at 8.08 per cent, the three wheeler sales was in red at -6.60 per cent and two wheeler segment posted a marginal growth of 1.69 per cent in April to November period driven by festive buying.

While the overall automobile exports cumulatively grew from April to November of FY-16, for the month of November alone however saw all the segments declining — passenger vehicle exports were down 8.60 per cent, commercial vehicle exports were down 2.88 per cent, three wheeler exports were down 34.74 per cent and two wheeler were down 17.13 per cent – pulling down the overall exports for November by 17.61 per cent.