Home >Auto News >PV wholesales rise for a 2nd month as dealers stock up
The increase was helped by dealer stocking as automakers are eyeing a sales spike during the festive season.ramesh pathania/mint
The increase was helped by dealer stocking as automakers are eyeing a sales spike during the festive season.ramesh pathania/mint

PV wholesales rise for a 2nd month as dealers stock up

The increase was helped by dealer stocking as automakers are hoping retail sales will accelerate further during the crucial festival months of October and November.

India’s passenger vehicle and two-wheeler wholesale dispatches rose for the second consecutive month in September, in a steady recovery from April when the pandemic-induced lockdowns severely depressed demand.

The increase was helped by dealer stocking as automakers are hoping retail sales will accelerate further during the crucial festival months of October and November.

Wholesales or factory dispatches of passenger vehicles grew 26.5% from a year earlier to 272,027 in September, showed data issued by the Society of Indian Automobile Manufacturers (Siam) on Friday. Sustained demand for compact cars and smaller sport-utility vehicles in rural and semi-urban markets as well as some pockets of the urban market fuelled growth.

Utility vehicle sales grew by 24.5% from a year earlier to 96,633 units in September thanks to increased dispatches by Maruti Suzuki India Ltd, Hyundai Motor India Ltd and Kia Motors India Ltd.

Passenger cars also posted a robust sales performance, growing 28.9% to 163,981 units as more people chose affordable, small cars to avoid public transport amid fears of contracting an infection.

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To be sure, retail automobile sales lagged wholesales during the month. Retail sales of passenger vehicles grew just 9.8% to 195,665 units in September, according to data released by the Federation of Automobile Dealers Associations earlier this month.

The growth in wholesales is also due to the low base of the year-earlier month when automakers experienced a contraction in demand amid an economic slowdown and the increase in vehicle prices due to change in emission and safety norms.

“Wholesales have witnessed healthy growth due to inventory re-stocking with dealers, prior to the festive period," said analysts of Emkay Securities in a note on 7 October.

“The months of Aug-Sep ’20 have brought plenty of signs that the volumes may be well along on its recovery from a sharp cyclical downturn. We estimate that the recent recovery volumes will manifest into a powerful cyclical rally across segments," they added.

Maruti Suzuki and Hyundai Motor, the country’s top two carmakers, recorded 33.4% and 23.6% growth in sales in September at 150,040 units and 50,313 units, respectively.

“Before the festive season, manufacturers usually push inventory to the dealerships," said Kenichi Ayukawa, president, Siam. “We are expecting very strong demand during the festive season. In the last few weeks, demand in the urban markets has also started to improve."

“Whether the current demand situation will sustain or not, we will get to know that in the January to March quarter," Ayukawa said.

In the two-wheeler segment, scooter sales were little changed at 5.56 million units from a year earlier, while motorcycle sales grew by 17.3% to 1.22 million units as demand for entry and executive segment motorcycles recovered in rural and semi-urban markets. Overall, two-wheeler sales jumped 11.6% to nearly 1.85 million units.

Motorcycle sales have picked up faster compared to the other segments due to quicker recovery in demand in the rural and semi-urban areas compared to the metro and tier-1 cities. A good summer crop, decent monsoon and comparatively slower spread of virus infection have aided the recovery in rural markets.

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