As per data recorded during the January to March 2016 period, the Indian automobile market has witnessed robust growth despite restrictions on sale of high engine capacity diesel vehicles. During the study period, utility vehicle sales witnessed an increased by 12.7% to reach the 213,000 units mark as per data published by SIAM (Society of Indian Automobile Manufacturers). This growth figure is further supplemented by data collected during the 2015-2016 fiscal that shows an overall growth in utility vehicle sales of 6.25% that corresponds to total sales of 586,000 utility cars during the period.
Key drivers behind this growth include low car loan interest rates, easy credit, continued growth of the Indian economy, an increased interest among the middle class to own larger vehicles as well as pent up demand in the market. A combination of these factors has led to an increase in the sales of virtually all utility vehicles sold in India during the period. Taking a hint from the increased sales of such vehicles, automakers have also started wooing prospective customers as evidenced from the introduction of multiple utility vehicle models in the 2016 Delhi Auto Expo.
In this year’s budget, the government has also introduced an additional infrastructure cess of 4% on diesel vehicles with engine capacity over 1500cc. As a result of this additional cess, the cost of ownership of high capacity diesel vehicles is expected to increase by 1 to 2% in 2016.
Some of the vehicles that are expected to drive further growth in the market this year include Mahindra and Mahindra’s TUV 300 and KUV 100 as well as Maruti Suzuki’s Vitara Brezza and S-Cross.