Diwali Lights Up Vehicle Sales in October

 

Riding on pre-Diwali festivities, vehicle sales were in fast lane during the month of October 2016. Robust retail sales numbers in October made good for the tepid retail sales in September, healthy growth in despatches from the manufacturers to the dealers notwithstanding. M&HCV sales turning positive and passenger vehicles & two-wheelers sustaining growth momentum further lighted the mood of auto market. Total domestic sales across various vehicle categories grew by 8.1% y-o-y to 2,201,571 units in Oct’16.


Passenger vehicle sales remain steady


Festive demand, coupled with the payouts of the 7th Pay Commission and tremendous response to some of the models launched in the recent past, kept the passenger vehicle sales on course. Domestic PV sales at 280,677 units in October 2016 clocked a growth of 4.5% vis-a vis 268630 units a year ago.


Car market leader, Maruti Suzuki India (MSI) witnessed a marginal growth of 2.2% in domestic sales that added up to 123,684 units in October 2016 (October 2015: 121,063). MSI’s bread and butter segments - mini (Alto and WagonR) and compact (Swift, Ritz, Celerio, Baleno and Dzire) - were in negative terrain with their domestic sales in October 2016 falling by 9.8% and 1.8% year-on-year to 33,929 units (October 2015: 37,595 units) and 50,116 units (October 2015: 51,048 units), respectively. However, the sustained demand for Vitara Brezza helped the company clock a whopping 90.9% y-o-y increase in domestic sales of its UVs (also including Gypsy, Ertiga and S-Cross), which stood at 18,008 units in October 2016. Maruti Suzuki’s exports took a hit in October 2016, with shipments to overseas markets totaling 10,029 units, down 23.7% (October 2015: 13,146 units).


The second largest player in the PV market, Hyundai Motor India Ltd (HMIL) posted its highest-ever monthly domestic sales – 50,016 units in October 2016, which translated into a 6.4% growth versus 47,015 units in October last year. Exports at 14,356 units were, however, down 2.2% y-o-y.


Y K Koo, MD and CEO, HMIL, commented, ”Hyundai, with a highest-ever domestic volume of 50,016 units, registered record cumulative sales of 64,372 units in October 2016.  Hyundai achieved the highest and fastest domestic sales of 50,000 units mark within 15 months from the earlier milestone of 40,000 units.” The recently launched new Elantra has received an overwhelming response with 1,509 bookings resulting in a 4-5-month waiting period, he added.


UV major, Mahindra & Mahindra (M&M) registered a 2.8% uptick in domestic sales of its passenger vehicles, which aggregated 24,737 units during the month of October 2016, vis-a-vis 24,060 units in October 2015.


“The festive season has brought about some cheer for the automotive industry with improved sentiment, on the back of a near- normal monsoon, rural surge in demand and some new vehicle launches,” said Pravin Shah, President & CE, Automotive Division, M&M.


Another home-grown player, Tata Motors, saw its passenger vehicle sales in the Indian market zoom 23.7% to 17,742 units in October 2016 over 14,337 units a year ago, thanks to an increasing retail sales trend of its latest offering - Tiago hatchback. This is its highest monthly sales number for the company during the past four years.


Honda Cars India Ltd (HCIL) continued to head south, its domestic sales at 15,567 units in October 2016 registering a steep 22.8% de-growth (October 2015: 20,167 units). City sedan was Honda’s best-seller with 6,378 units, followed by Amaze with 4,009 units and Jazz hatchback with 3,011 units. The other contributors to the monthly sales were: BR-V (1,070 units), Mobilio (498 units), CR-V (41units) and Brio (535 units). The recently launched Accord Hybrid sold 25 units.


Toyota Kirloskar Motor (TKM) sold 11,651 units in the Indian market during October 2016, down 6.1% (October 2015: 12,403). The company exported 974 units of the Etios series in October 2016, which reflected an 18.7% fall y-o-y.


Ford India registered a sharp 25.0% decline in domestic sales to 7,508 units in October 2016 from 10,008 units in October 2015. However, the company’s exports at 14,535 units in October 2016 soared 40% over 10,412 units in October 2015.


Driven by its best-seller Kwid, Renault India clocked domestic sales of 12,409 units in October 2016 as against 7,396 units in the corresponding month last year, thereby registering a staggering 67.8% growth. The company also exported 1,528 units of Kwid during the month.


Nissan Motor India reported domestic sales of 6,108 units in October 2016, up 88.1% over 3,247 units in October 2015, thanks to the continued robust performance of the Datsun Redigo and the tremendous response to the recently launched Redigo Sport version.


Volkswagen India witnessed a steep 70.0% jump in domestic sales that stood at 5,534 units in October 2016 (October 2015: 3,255 units). The company also turned in an impressive performance on export front, shipping out 8,817 units during the month.


Two-Wheeler Sales Maintain Growth Momentum


A marked improvement in consumer sentiment in rural India, following a good monsoon season, helped two-wheeler sales stay on course in October 2016. Two-wheeler majors continued to register decent growth in October 2016 on the back of Navratris, Dhanteras and Diwali. Total domestic two-wheeler sales rose 8.7% y-o-y to 1,800,672 units during the month.


Hero MotoCorp, the largest two-wheeler manufacturer, witnessed sales of 663,490 units (including exports) in October, growing by 3.7% y-o-y. Domestic sales stood at 650,217 units in October 2016, up 4.0% over 625,031 units in October last year, while the exports were down 10.1% y-o-y to 13,273 units during the month. The company, which recorded its third consecutive month of 6-lakh-unit-plus sales, claimed to have sold more than a million units during this year’s festive season even before the Dhanteras day (October 28, 2016). An official release said, “This has overall been a record festive season for Hero MotoCorp. With this performance, the company’s dealer inventories have come back to normal levels.”


Honda Motorcycle & Scooter India (HMSI) recorded domestic sales of 470,358 units in October 2016, registering a growth of 8.9% over October 2015 when it had sold 431,887 units. Honda has sold more than 300,000 scooters consecutively for four months including October 2016.


Commenting on company’s performance, Keita Muramatsu, President and CEO, HMSI said; “As a trend, automatic scooters are clearly driving the two-wheeler industry growth and with the new scooter-only plant in Gujarat (HMSI’s fourth plant in India) achieving peak production capacity in September, Honda strategically met festive demand with seamless dispatches over two months. We acquired more than a million customers in the two festive months. What is more encouraging is that we have added 260,000 customers only on the Dhanteras day.”


Chennai-based TVS Motor Company reported domestic sales of 272,229 two-wheelers in October 2016, witnessing 17.6% y-o-y upsurge. The company’s two-wheeler exports during the month slipped 3.1% y-o-y to 31,620 units. With domestic sales & exports aggregating 303,849 units in October, the company crossed the monthly two-wheeler 3-lakh-unit sales-mark for the first time. 


Bajaj Auto sold 212,997 motorcycles in domestic market during October 2016, clocking a 5.4% uptick, compared to 202,042 units in October last year.


India Yamaha Motor posted domestic sales of 86,430 units in October, higher by 22.1% (October 2015: 70,812 units).


Continuing its dream run, Royal Enfield reported domestic sales of 58,379 motorcycles in October 2016, marking its highest sales ever for any month. The company registered a 32.3% increase over domestic sales tally of 44,138 units in October last year.


M&HCV Sales Turn Around After 3 Straight Months of Decline


In what is good news for the Indian auto market, sales of the Medium & Heavy Commercial Vehicles (M&HCVs) – a bellwether of the economy – which had seen a slide over the past three months, turned positive in October 2016, clocking a growth of 16.9%. With the LCV sales sustaining the momentum, domestic sales of CVs rose by 11.9% y-o-y to 65,569 units in October 2016.


Tata Motors recorded its highest-ever CV sales this year, selling 28,738 units in the domestic market during October 2016, up 16.9% (October 2015: 24,580). Domestic sales of Tata M&HCVs at 13,575 units in October 2016 notched up an 8.6% growth over 12,504 units in October 2015. Continuing upward trend, the company’s LCV sales posted a healthy 25.6% y-o-y increase to 15,163 units in October 2016.


Ashok Leyland’s domestic sales increased by an impressive 35.9% y-o-y to 11,465 units in October 2016.


Mahindra & Mahindra witnessed a 3.7% drop in its domestic CV sales, which aggregated 18,058 units in October 2016, compared to 18,756 units a year earlier.


VE Commercial Vehicles maintained its double-digit growth, witnessing an 11.2% uptick in its domestic sales at 3,854 units in October 2016 (October 2015: 3,466 units).


Auto market witnessed a decent growth in retail sales during October 2016 riding on festive fervour. The fact that M&HCV sales were back on growth trajectory is encouraging. The recent demonetization of Rs. 500 and Rs. 1,000 currency notes may adversely impact rural market, especially two-wheeler sales, in the short run.

 

 

 

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