The Festival of Lights Fails to Light Up Vehicle Sales

Diwali and other festivals failed to cheer the auto market, as the vehicle sales were subdued during the month of October 2014. The auto retail market was expecting a blast during the festivities, especially after gradually improving sales numbers and the uptrends recorded during the last five months, but it ended up in a whimper. Total sales across vehicle categories, including passenger cars, commercial vehicles, three-wheelers and two-wheelers at 1,787,146 units were down 3.8% y-o-y during the month.

Passenger Vehicles

Straying from the 5-month growth streak, the passenger vehicles went off-track again in October 2014 that saw domestic sales of passenger vehicles decline by 7.5% to 221,151 units in October 2014 from 239,140 units during the same month last year. The passenger vehicle exports, however, moved up the growth curve, witnessing a 5.8% uptick y-o-y to 48,827 units during the month.

The country's largest car maker Maruti Suzuki India (MSI) managed to survive slipping into negative territory with a paltry growth of 1.1%. The company’s domestic sales during the month stood at 97,069 units as against 96,062 units in October last year. The exports at 6,904 units in October plummeted by 23.5% y-o-y.

The company attributed the lukewarm sales numbers to the less number of working days due to festivals.

MSI's sales in the compact segment comprising Swift, Celerio, Ritz and Dzire declined by 3.5% to 37,083 units in October this year as against 38,410 units during the same period last year. The recently launched mid-sized sedan Ciaz, however, received good response in the market with the company selling 6,345 units in October.

Rival Hyundai Motor India Ltd (HMIL) sold 38,010 units in the domestic market during the month of October 2014, as compared to 36,002 units in October 2013, up 5.6%.  The company’s cumulative sales at 56,019 units, including 18,009 units of exports, grew by 11.6% y-o-y in October 2014.

Rakesh Srivastava, Sr VP- Sales and Marketing, HMIL said, “Hyundai volumes grew by 9% over last month with significant increase in sales of additional and replacement buyers propelled by strong demand for our new models like Elite i20, Xcent. We anticipate that this positive momentum would build up further with increase in sales of entry buyers if there is strong promise of improvement in economic and macro factors in rural and urban markets.” 

Driven by the continuing robust demand for its new offerings, namely, Honda City, Mobilo and Amaze, Honda Cars India Ltd (HCIL) stayed in fast lane, witnessing a growth of 18.1% to 13,242 units in October 2014 from 11,214 units in the corresponding month last year. HCIL also exported a total volume of 361 units during October 2014.

Model wise domestic sales break-up of HCIL for October 2014 stood as follows: Brio - 1,584 units; Amaze - 3,482 units; Mobilio - 2,985 units; City - 5,120 units; and CR-V – 71 units.

The company also achieved the milestone of crossing 1 lakh units in the current financial year with an overall growth of 43% y-o-y during the period April–October 2014.

Jnaneswar Sen, Sr Vice President – Marketing & Sales, HCIL said, “We have clocked excellent sales during the year so far where all our products have received tremendous response. Starting November, the Tapukara plant will start operations in the second shift, thereby, ensuring better availability of the Honda City. This will also see full capacity utilization of Tapukara plant.”

Toyota Kirloskar Motor (TKM) sold 12,556 units in October 2014 in the domestic market as compared to 13,162 units in October 2013, which reflected a 4.6% decline. The company exported 1,160 units of Etios in October 2014, registering a negative growth of 51.9% vis-a-vis 2,416 units exported in October last year. 

“We have maintained the sales volumes as September, in the domestic market and hope to see growth in the next two months,” N Raja, Director and Senior Vice President, Sales and Marketing said.

With domestic sales volume of 4,106 units in October, another Japanese car maker, viz. Nissan Motor India also reported an 18.8% decline y-o-y. However, the company’s exports at 9,456 units stayed on growth curve, increasing by modest 2.9% y-o-y.

With novelty factor ebbing off and EcoSport losing its charm, Ford India witnessed a 26.6% decline in the domestic sales to 6,723 units in October 2014 from 9,163 units a year ago. The company’s exports also slid into the negative territory, falling by 15.4% y-o-y to 4,907 units during the month.

"Macro-economic indicators suggest a gradual recovery in the economy. But the positive customer sentiment is yet to translate into vehicle sales, potentially due to high interest rates and inflation,"  said Anurag Mehrotra, Executive Director - Marketing, Sales & Service, Ford India.

Domestic sales of Mahindra & Mahindra (M&M)  passenger vehicles (including UVs and Verito) aggregated 19,254 units in October 2014, falling by 16% from the corresponding sales tally of 22,925 units in October last year.

Tata Motors, another home-grown auto major, remained in deceleration mode. The domestic sales of Tata passenger vehicles were down 16.8% to 11,469 units in October 2014 from 13,791 units a year earlier.

General Motors India (GMI) continued to head southward, the company’s domestic sales diving steeply by 46.8%             y-o-y to 4,103 units in October.

Commercial Vehicles

M&HCVs sustained the growth momentum of the previous month with domestic sales surging by 25.3% from 14,261 units a year ago to 17,866 units in October this year. However, the domestic sales of LCVs after showing promise in September 2014, relapsed into the reverse gear, contracting by 13.2% y-o-y to 34,099 units in October 2014.

The market leader, Tata Motors notched up a handsome 30.5% growth in M&HCV sales in domestic market, which added up to 10,352 units during the month of October 2014. On the other hand, domestic sales of Tata LCVs slumped 32.8% y-o-y to 16,939 units during the month.

Ashok Leyland stayed in top gear and saw its domestic CV sales grow by 26.1% y-o-y to 7,266 units in October 2014.

Volvo Eicher Commercial Vehicles (VECVs) posted a 5.4% drop in domestic sales, which stood at 2,494 units in October 2014, as against 2,637 units a year ago. 


The impressive run of two-wheelers hit a road block in October 2014, suggesting that the fledgling recovery in vehicle sales is fragile and not broad-based. Total two-wheeler sales in domestic market adding up to 1,461,712 units, were down 3.6% y-o-y. 

Market leader Hero MotoCorp saw its domestic sales dip 10.3% to 550,688 units in October 2014, as against 614,124 units in the same month last year. The company’s two-wheeler exports at 24,368 units, however, recorded a whopping 115.7% upswing y-o-y.

Bajaj Auto registered sales of 204,281 two-wheelers in the local market, lower by 10.8% vis-a-vis 228,998 units a year ago. Bajaj two-wheeler exports stayed on the high-growth trajectory, rising by a healthy 11.2% y-o-y to 132,642 units during the month.

Honda Motorcycle and Scooter India (HMSI) that had been growing at a fast clip encountered a speed-breaker. The company managed to fend off the scare with a measly growth of 0.4% in domestic sales that numbered 361,670 units in October 2014, compared with 360,150 units in October 2013.

Chennai-based TVS Motor clocked a healthy 17.9% rise in domestic two-wheeler sales that increased from 173,229 units in October 2013 to 204,294 units in October 2014.

India Yamaha Motor sold 54,698 two-wheelers in the domestic market during October 2014, which translated into 5.6% growth over corresponding sales figure of 51,808 units in October last year.

Royal Enfield, a niche player in high-performance bikes, sustained the momentum with a robust 47.4% growth in domestic sales of its motorcycles, which numbered 25,510 units in October 2014 vis-à-vis 17,306 units during the same month last year. The company also exported 529 motorcycles posting a 49.9% increase y-o-y.

With passenger vehicle segment slipping back to the reverse-gear and two-wheeler sales stumbling, the uncertainty has come back to haunt the auto market. The huge plus for the auto market, however, is that M&HCV sales have swerved back on track signaling that the economic activity in general is slowly picking up. The negative growth of passenger vehicle and two-wheeler sales in October 2014 is hopefully a blip.

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