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Retail auto sales grow 8% in October

PVs record 14% retail growth; wholesales up 0.28% after 11-month slide.

Car sales in August fell the most on record (Representational image)

MG Motor India, MG Motor, SAP, Cognizant, Adobe, Airtel, TomTom, Unlimit,

Retail volumes of passenger vehicles rose a smart 14% year-on-year in October driving up overall auto sales for the month to 8% y-o-y. While retail volumes for two-wheelers rose a good 9%, those for commercial vehicles were weak falling a sharp 23.51% y-o-y. Analysts attributed the relative better sales of passenger vehicles in October to festive demand. “Our industry interactions lead us to believe that festive season retail sales are up by mid-single digits and benefited from a sharp jump in discounts,” analysts at Nomura noted.

While experts were not certain the trend would sustain, given the October volumes were driven by festive season purchases, inventories with manufacturers have been trimmed on the back of production cuts. Besides, the inventory levels in the segment have come down to less then one-month level, said SIAM president Rajan Wadhera. The caution arises from the fact that the SIAM data for September was contradicted by Federation of Automobile Dealers Associations (Fada) which had put out a more sedate set of numbers.

Nonetheless, wholesales numbers (despatches from manufacturers to the dealers) improved in October although the declining trend persisted as volumes fell 12.76% y-o-y. The average fall in the last few months has been around 20% dip y-o-y. While wholesale volumes for PVs rose marginally by 0.28% y-o-y, after 11 consecutive months of decline,those for two-wheelers and commercial vehicles continued to fall.

The marginal increase in PV wholesale despatches in october was due to better numbers from Maruti Suzuki, which cut production — the ninth consecutive month — to align despatches with reduced demand. New entrants, Kia Motors and MG Motor, also contributed to better wholesale volumes as they do not have to deal with unsold inventory.

SIAM said sales in the festive season had been better than last year. “Finance is more easily available now and lending rates are also improving. Besides new launches in the utility vehicle segment are helping customer sentiment,” Siam president Rajan Wadhera said.

“We are hopeful that November-December months would be better than last year. We also expect pre-buying to take off during the January-March period next year,” Wadhera said.

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First published on: 12-11-2019 at 08:39 IST
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