India has seen a 17 percent increase in car sales within a 13-month period ending in July in effect of lowering fuel prices and rising consumer interest. Demand for Renault's Kwid minicar took the bulk of the industry-wide growth with 11,968 units sold last month, Bloomberg reported.
The Society of Indian Automobile Manufacturers (SIAM) reported a total of 259,685 domestic passenger units sold last month compared to the 222,368 units from the same period last year. Meanwhile, growth in public vehicles jumped 42 percent totalling 61,105 units against the 45,191 units during the same period, NDTV cited.
Senior vice president for sales and marketing at Hyundai Motor Rakesh Srivastava said monsoon rains have pushed government-owned oil refineries to reduce gasoline and diesel prices. This encouraged people from the rural areas to own vehicles, where at least 30 percent of the country's total auto sales come from.
SIAM Deputy Secretary General Sugato Sen added, "The new models in the UV segment have created a lot of excitement in the market. Also the sentiment is positive due to better rains and coming of the 7th Pay Commission. All these factors put together are responsible for the off take which is happening."
As sales of India's biggest carmaker Maruti Suzuki India rose by 14 percent, prices of SUV models like Vitara Brezza and Baleno hatchback surged relative to demand and currency exchange. Hyundai announced it will increase prices starting Aug. 16.
This has been the fastest growth in PUVs since October 2015, but the figures remain sluggish for car sales as customers gradually switch to compact SUVs. Motorcycle sales were particularly positive in the provinces noting an 11 percent increase to 897,092 units during the first week of August. Hero MotoCorp's scooter sales spiked a little more than 60 percent, followed by Rival Bajaj and HMSi at 21 percent and 19 percent growth respectively.
As for the sales of medium and heavy-trucks, Send said growth revival is expected to follow through after the harvesting season.