Car sales in India grew at the fastest pace in 5 years, up 7.87 percent in 2015-16, driven largely by new model launches and heavy discounts in a "challenging environment".
According to Society of Indian Automobile Manufacturers (SIAM), domestic car sales stood at 20,25,479 units in 2015-16 as compared with 18,77,706 units in the 2014-15.
"The previous highest growth was achieved in 2010-11 when car sales grew by 29.08 percent. The growth in 2015-16 was mainly because companies have tried to come up with new models, which have been accepted in the market," SIAM Deputy Director General Sugato Sen told reporters here.
Moreover, many companies also gave heavy discounts and a lot of efforts were made by the manufacturers to induce purchase, he added.
Sen said the growth in FY16 has been achieved amid a "challenging environment for the auto industry" such as persisting weak consumer sentiment due to high interest rates, ambiguity over diesel cars due to 'adhoc policies' and "intervention of courts complicating matters and stigmatising technologies".
"The sector is the highest taxed in manufacturing sector ... There is only 60 percent capacity utilisation in the auto industry today," he said, adding "the profitability of many car companies are still in the negative today in India".
Vehicle sales across categories were up 3.78 percent at 2,04,69,385 units in 2015-16 from 1,97,24,371 units in the previous fiscal.
"Auto industry is still in a slow recovery path," Sen added.
During the fiscal, total two-wheeler sales were up 3.01 percent for the fiscal at 1,64,55,911 units, up from 1,59,75,561 units in the previous year.
Motorcycle sales for the fiscal, were down 0.24 percent to 1,07,00,466 units from 1,07,26,013 units in corresponding fiscal.
Sales of commercial vehicles were up 11.51 percent to 6,85,704 units as against 6,14,948 units 2014-15.
For the month of March, domestic passenger car sales at 1,75,730 units as compared with 1,76,260 units in the same month last year, down 0.3 percent.
During the month, car market leader Maruti Suzuki India posted a growth of 7.43 percent in car sales at 92,105 units as against 85,733 units in the same month last year.
Rival Hyundai Motor India had a sales of 32,986 units as against 39,325 units in the year-ago month, down 16.12 percent. Honda Cars India saw a decline of 14.43 percent at 16,726 units as compared with 19,547 units in March last year.
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