The Maruti Suzuki chairman had said last week there were few signs of festivity in the car market. Indeed, sales of cars in October reflected little festive cheer with the growth in passenger vehicles skidding to very low single digits.
RC Bhargava’s premonition seems to have come true. The Maruti Suzuki chairman had said last week there were few signs of festivity in the car market. Indeed, sales of cars in October reflected little festive cheer with the growth in passenger vehicles skidding to very low single digits. The country’s top four carmakers reported only a 2.5% year-on-year rise in wholesale volumes as consumers shied away from purchases thanks to higher insurance premiums, fuel prices and interest rates. Maruti Suzuki reported flat sales, up by 0.6% y-o-y.
The subdued wholesale despatches in October reflect weak consumer sentiment, Rajan Wadhera, president, automotive sector, Mahindra & Mahindra, said.
“We are somewhat cautious on sales during the festive season,” Wadhera said. M&M’s despatches increased 2.6% y-o-y in October.
The automobile dealers association had said that retail sales were down 10-20% y-o-y during October. This would be a blow to carmakers who typically sell around 40% of their annual volumes during the festive season.
Puneet Anand, senior GM (marketing), Hyundai India, had remarked that car sales could well be lower than that in the 2017 festive season. Hyundai’s sales rose a shade below 5% y-o-y partly driven partly by its new Santro. “Retail sales appear to be weak going by the wholesale despatches,” Gaurav Vangaal, senior analyst for forecasting at IHS Markit, said.
While despatches of bikes and scooters jumped by 12-25% y-o-y, this came off a favourable base due to the early festive season in 2017.
YS Guleria, senior vice-president (marketing & sales), HMSI, had been cautious ahead of Navratri, saying consumers would need to be coaxed into paying more for bikes and scooters. HMSI’s despatches rose 12% y-o-y during the month.
Nonetheless, given prices of two-wheelers have been driven up by the rise in insurance premiums, sales were reasonably good. Commercial vehicle (CV) manufacturers continued their good run with Tata Motors and Ashok Leyland reporting increases of 21.6% y-o-y and 17% y-o-y.
Tata Motors reported an 11% y-o-y growth in despatches of cars on better demand for the Tiago and Nexon models. TML despatched 18,290 units during October against 16,475 units a year ago. The home-grown automaker grew over 29% y-o-y in H1FY19.
Hero MotoCorp expanded domestic sales by 16.4% y-o-y to 7,34,668 units in October from 6,31,105 units in the same month of 2017. It had registered around 5% decline in domestic sale during October 2017. Its Japanese rival HMSI reported 12% y-o-y increase in October 2018 sales on the back of 7% y-o-y decline last year.
The company sold 4,90,124 units last month compared to 437,548 units a year ago. TVS also posted a 25.3% y-o-y jump in monthly sales. Its despatches stood at 3,38,988 units in October 2018 vs 2,70,372 units in October 2017. The two-wheeler market had been growing at 11.5% y-o-y for the first six months of the current fiscal. While TML sold 39,420 CVs last month against 32,411 units a year ago, Chennai-based ALL reported increase in domestic sales from 12,944 units to 15,149 units during October 2018.