Festive spirit drives record Sep car sales

Maruti Suzuki, the country’s largest carmaker, recorded domestic PV despatches of 150,812 units, a 1.6% increase from a year earlier. (Bloomberg)
Maruti Suzuki, the country’s largest carmaker, recorded domestic PV despatches of 150,812 units, a 1.6% increase from a year earlier. (Bloomberg)


Maruti, Hyundai, Mahindra report highest-ever monthly sales

Indian passenger vehicle (PV) makers, including market leader Maruti Suzuki India Ltd, reported record monthly dispatches in September, capitalizing on improved parts supplies as they ramped up production to meet demand following a raft of new car launches ahead of the festive season.

Vehicle dispatches hit a new record at 363,733 units in September, a 2.4% increase from a year ago, according to data from carmakers and industry estimates.

The August-to-November festive season traditionally drives a substantial share of Indian car sales, prompting automakers to replenish dealer stocks in anticipation of heightened demand. In addition, as semiconductor shortages ease, carmakers have lined up 81 new launches in the current fiscal year, piquing buyer interest.

Graphic: Mint
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Graphic: Mint

The surge in despatches in September was led by sales of sport utility vehicles (SUVs), which now command more than half (52%) of all PV volumes, indicating a shift in buyer preferences.

Retail sales for the six months to September exceeded the 1.94 million mark, indicating the industry is on track towards achieving record sales of 4 million units for the full financial year.

Additionally, stocks with dealers and companies surged to 331,162 units, crossing the 30-day threshold for the first time in many quarters, said Shashank Srivastava, senior executive director at Maruti Suzuki.

Maruti Suzuki, the country’s largest carmaker, recorded domestic PV despatches of 150,812 units, a 1.6% increase from a year earlier. Other PV makers, including Mahindra & Mahindra Ltd (20% increase in despatches in September from a year earlier) and Hyundai Motor India Ltd (13% growth, including exports), also saw their highest-ever monthly sales. Tata Motors Ltd, on the other hand, saw domestic PV sales shrink 6% for the month, owing largely to its winding down production of an older variant of its Nexon compact SUV.

“For Maruti Suzuki, this has been a good quarter at 459,000 units in sales, which is also the highest ever in the passenger vehicle segment. We also claimed the number one position in the SUV segment, selling over 217,000 SUVs in the first half of the fiscal year. Our market share has now improved to 42.3%, increasing from 41% in September 2022," Srivastava said.

“The SUV segment emerged as the driving force behind the industry’s growth, constituting 52% of sales in September and 48.3% in H1. Conversely, all other segments saw a decline in sales. Moreover, rural areas outperformed urban markets, with rural growth at 11.7% compared to urban growth at 9%. Rural sales penetration for Maruti Suzuki stood at 44.3%, a slight increase over the previous year," he added.

For Hyundai, new launches like the Exter micro-SUV have propelled sales at a time the availability of popular models like the Creta is also improving. “September has witnessed our highest-ever monthly sales, with 71,641 units despatched, a 13% growth, including exports, and achieving the second-highest domestic sales of 54,241 units, reflecting a 9% increase over last year. This year has been defined by a surge in new models across our entire lineup, with models like Exter and Verna being well-received by customers. Creta, despite no model changes, has continued to impress, with a 17% growth in the nine months to September. The SUV segment has been a driving force for us, contributing 66% of our sales in September and 54% in the first half of the year. As we enter the festival season with a healthy stock of 20-25 days, we’re optimistic about ending the year with a 9% growth rate, projecting an impressive 820,000 units for 2024, fully utilizing our capacity," said Tarun Garg, chief operating officer of Hyundai Motor India.

The surge in car sales is primarily led by the demand for more expensive models.

“The record PV sales in the first half of the year in terms of wholesales is largely on expected lines if we were to go by FY24 industry growth expectations of close to 7-9% (coming on a life-high FY23 wholesales of about 3.9 million units). What is important is how the main festive season starts from the Navratri period and culminates in Diwali, as dealers have stocked inventory in anticipation of a good festive season. The start of the festive season with Onam in Kerala and Ganesh Chaturthi in western India has been encouraging. However, one needs to keep a close watch on the October-November festive season. We believe with a slew of new launches from the industry, the demand for the upper end of the market led by SUVs should continue to perform well," said Jay Kale, an analyst at Elara Capital.

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