Auto sales rise ahead of crucial festive season
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Mumbai: Sales at most auto makers rose in September as firms stocked dealerships ahead of the festival season that starts in October.
Cumulative sales of the top ten passenger vehicle makers touched 2,74,615 units, up 21% from a year ago, according to monthly sales data from auto firms.
Domestic sales at market leader Maruti Suzuki India Ltd jumped 29.4% to a record 1,37,321 units in September as sales in all vehicle categories rose. Even sales of entry-level models such as Wagon R and Alto, which were under pressure for months, rose at a brisk 24.8% to 44,395 units. Led by the Baleno hatchback, cumulative sales of compact cars also advanced 12.3% to 50,324 units over last year. Aided by Brezza, utility vehicles sales surged 191% to 18,423 units from a year ago. It’s the highest ever sales in any September and in the domestic market for the firm, Maruti said in a note.
With the September sales, Maruti has widened its lead over rivals in the passenger vehicle market.
Utility vehicle market leader Mahindra and Mahindra Ltd’s passenger vehicles sales increased 5% to 20,537 units over last year.
Hyundai Motor India Ltd, the second largest car maker in the country, did not release its sales figures.
Auto makers continued to attract sales with special editions and new variants. A good monsoon and wage hikes for government employees are expected to fuel consumption in the festival season starting October, which will see Navratra, Dussehra and Diwali in a single month. Last year, Diwali was celebrated in November.
The distribution of monsoon this season has been the best in the last three years, with only one-third of the districts seeing a deficiency, compared with almost half in fiscal 2015 and 46% in 2014, wrote Dharmakirti Joshi, chief economist at Crisil Ltd, in a 1 October report. Importantly, most deficient districts are either well-irrigated or not important agriculturally, he said.
“We believe the upturn in rural incomes should push private consumption above 8% in fiscal 2017, compared with 7.4% in fiscal 2016,” said Joshi.
Urban consumption, he said, remains healthy and will benefit further from lower inflation, spill-overs from robust agricultural activity in manufacturing and services, greater transmission of past interest rate cuts, and the seventh pay commission and one rank one pension payouts.
Rural markets account for 54% of private consumption in India and the indicators reveal green shoots, with recovery likely to gain strength in the coming months, Joshi said. “Therefore, we believe the recovery in consumption will be two-legged this time around,” he added.
Sales at some other auto makers also jumped, albeit on a much lower base. The Tiago drove passenger vehicles sales at Tata Motors Ltd up by 24% to 14,601 units from a year ago. The Kwid continued to push volumes at Renault India Pvt Ltd, with the local arm of the French carmaker clocking a 590% jump in volumes to 12,300 units. Nissan Motor India Pvt. Ltd and Volkswagen Passenger Cars Pvt. Ltd, too, saw sales advance 96.9% to 5,151 units and 22% to 3,929 units, respectively, over a year ago.
Aided by the Innova Krysta, sales at Toyota Kirloskar Motor Pvt. Ltd also rose 6% to 12,067 units. Ford India Pvt. Ltd’s despatches increased 9% to 9,018 units.
Local arms of Honda Motor Co.and General Motors Corp. were the only firms that saw sales skid. Sales at Honda slipped to 15,034 units from 18,509 units a year ago while GM struggled with sales touching a low of 2,101 units from 2,478 units a year ago.
Abdul Majeed, partner, Price Waterhouse, said while growth is expected to be robust in the festive season, after the festivals “an increase in private investment and overall growth in the economy will be critical driving sales across the segment”.
Car sales in India, one of the fastest growing auto markets have expanded for 13 months. Last month, encouraged by the consistent performance, the industry body Society of Indian Automobile Manufacturers revised the growth estimates upwards to 10-12℅ from 6-8℅ earlier.