Vehicle sales: Automakers cheer with double digit growth; Diwali spirit high

The industry is quite upbeat about good sales during the current month as well when Diwali falls and even in December when sales are high due to manufacturers offering discounts to clear the calendar year inventory.

By:November 2, 2020 10:39 AM
Retail sales, auto sales, gst collections, economic recovery, GDP growth, Indian economyThere are concerns that excess inventory due to tepid sales might raise more problems for dealers.

 

The festive season of Navratri brought cheer to automakers, particularly passenger vehicle (PVs) manufacturers, with all of them posting strong double-digit growth in October.  Though these are factory despatches to dealers, industry executives said retail sales must have kept pace with wholesales, otherwise dealerships would not have accepted higher inventories. The industry is quite upbeat about good sales during the current month as well when Diwali falls and even in December when sales are high due to manufacturers offering discounts to clear the calendar year inventory. Company executives said inventory with dealers is now at normal levels of four weeks. At Maruti Suzuki’s earnings conference on October 29, company chairman RC Bhargava said demand for cars remains reasonably robust on the back of pent-up appetite and good purchasing power in rural India.

He had even said there is no need for a cut in GST rates at the moment. “Typically a downturn is followed by a good year. We have seen about one and a half years of a downturn so there is a demand pull from postponed purchases,” he said. However, he had pointed out that it was hard to predict whether demand would sustain beyond December after the festive demand had been met and demand for personal vehicles satiated. “If demand falls next year and if the decline persist sustains, the government should step in,” he said.

Maruti sold 96,700 vehicles during the Navratras. During October, Maruti Suzuki clocked stellar numbers, surpassing its traditional average monthly sales of 1.5 lakh units per month. It recorded despatches of 1,66,825 vehicles, registering a good 11.2% month-on-month increase in sales. The company continued its growth momentum on a year-on-year basis as well and saw an uptick of nearly 18% in the sales numbers.

Meanwhile, Hyundai Motor India recorded its highest domestic sales since its inception. The domestic sales increased by 13.2% m-o-m to 56,065 units. The previous highest monthly domestic sales number was achieved in October 2018 with 52,001 units. Hyundai, too, continued its growth in y-o-y numbers for the third consecutive month as it recorded a good 12.5% increase versus October 2019.

Tarun Garg, director (sales, marketing & service), Hyundai Motor India, said the October month sales performance has set a positive tone for the overall business environment. “With the advent of the festive season, Hyundai shares the spirit of happiness and celebration with our customers through our super performer brands – all new Creta, Verna, Venue, Aura, and Nios,” he said.

Mahindra and Mahindra (M&M) clocked total domestic sales of 42,338 units, an improvement of over 23% m-o-m, while the sales on a y-o-y basis remained sluggish and declined 15.2%. Veejay Nakra, chief executive officer (automotive division), M&M, said, “The festive season has started on a positive note with deliveries and bookings being higher than last year. Going forward, this augurs well for a robust festive demand which in turn will help the industry in the short term.”

Two-wheeler manufacturer Hero MotoCorp recorded its highest sales in any single month as it sold 7,91,137 motorcycles and scooters in the domestic market, which was an increase of nearly 35% on a y-o-y basis, and over 13% on a m-o-m basis. “A positive turnaround in customer sentiments -– particularly for motorcycles across markets, continued government policy support and a credible resumption of supply chain, logistics and business operations have enabled the company to achieve record numbers during the auspicious festive period. With the higher dispatches during the month, the company’s customer touch points across the country now have adequate inventories in line with market demand in the ongoing festival period,” the company said in a statement.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Latest Auto News