Festive Buys, New Models Help Passenger Vehicle Sales Snap 11-Month Slide In October
Passenger vehicle sales in India rose marginally in October aided by positive festive season sentiment and introduction of new models in utility vehicle space, just about managing to snap 11 continuous months of decline in sales, Society of Indian Automobile Manufacturers said on Monday.
The auto industry body expressed hope that the positive sentiment would continue in November and December as well, thus helping the industry "slowly come out of the slowdown".
According to the latest data by SIAM, passenger vehicle sales during October increased by 0.28 percent to 2,85,027 units, from 2,84,223 units in the year-ago period. Passenger vehicle wholesales in India had declined for the eleventh consecutive month in September.
However, vehicle sales across categories registered a decline of 12.76 percent last month to 21,76,136 units from 24,94,345 units in October 2018. Barring utility vehicles, passenger carriers and quadricycles, all other vehicle categories witnessed decline in sales during the month.
- In April-October period, however, the passenger vehicle sales witnessed a drop of over 20 percent as compared to the same period last year.
- In October, domestic car sales were down 6.34 percent to 1,73,649 units as against 1,85,400 units in the same month last year.
- Utility vehicle sales on the other hand saw an increase of 22.22 percent during the month at 1,00,725 units as against 82,413 units in year-ago period.
"Sales in the festive season have been better than last year which is a good sign. We wish it continues in November and December as well and help us slowly come out of this slowdown," SIAM President Rajan Wadhera told reporters in New Delhi.
Finance availability is becoming better and lending rates are also improving besides new model launches in the utility vehicle segment has also helped in creating positive customer sentiment, he added.
"As industry body, 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.
Besides, the inventory levels in the segment have come down to less then one month level, he added.
- Total two-wheeler sales in October declined 14.43 percent to 17,57,264 units compared to 20,53,497 units in the year-ago month.
- Motorcycle sales, last month, declined 15.88 percent to 11,16,970 units as against 13,27,758 units a year earlier.
- Scooter sales last month declined by 9.83 percent to 5,80,120 units as against 6,43,382 units in the year-ago period.
"Two-wheelers largely cater to mobility requirements in the rural area. In the past few months, there have been various disruptions like floods and excessive rainfall in several regions. However, we expect things to change for better starting this month," Wadhera said.
Similarly, commercial vehicle sales were down 23.31 percent at 66,773 units in October, SIAM said.
Commenting on drop in commercial vehicle sales, Wadhera said the segment is an indicator of state of economy in the country and expressed hope that recent government measures, like the package announced for the real estate industry, would help in the revival of the vertical.
When asked about his views on wholesale versus retail data, he said for the time being the industry body would continue with the wholesale reporting as the retail data (Vahan dashboard) was still not comprehensive.
"It does not have data from Telangana, Madhya Pradesh and Andhra Pradesh and two union territories. Eventually, the thinking is that it is the right way to go but there is still some time before it reaches a stage of maturity," Wadhera noted.
In the passenger vehicle segment, Maruti Suzuki India posted a 2.33 percent increase in its October sales at 1,39,121 units. Hyundai Motor India witnessed a 3.83 percent decrease at 50,010 units, while Mahindra & Mahindra posted a fall of 23.33 percent to 18,444 units during the month.
In the two-wheeler category, Hero MotoCorp posted a 18.03 percent drop in sales at 5,86,988 units, while rival Honda Motorcycle and Scooter India saw sales decline by 0.47 percent to 4,87,819 units.
Similarly, Chennai-based TVS Motor Company saw its sales slump by 25.46 percent to 2,52,684 units in October.
On the other hand, October retail sales data showed a somewhat better picture in terms of sales, pointing to inventory correction taking place in the industry.
According to the retail sales data, total automobile sales were up by 7.93 percent at 18,16,440 units, compared to 16,82,995 units in October 2018.
Similarly, passenger vehicle sales stood at 2,96,642 units last month, compared as against 2,60,384 units in the same month last year, an increase of 13.92 percent.
Two-wheeler retail sales were up by 8.91 percent at 13,88,538 units as against 12,74,988 units in October 2018.
Highlights From SIAM President Rajan Wadhera’s Press Conference
- In heavy and medium commercial segment, inventory is not an issue, demand is.
- There are more trucks, but less goods to move.
- Slowdown in GDP growth, new axle loading norms, are among the key issues facing the segment.
- Heavy commercial vehicle segment is in "serious trouble".
- Retail sales have been good due to festive season; better than the last festive period.
- Passenger vehicle segment's inventory level is normal at less than one month.
- Based on conversations with dealers, there is positive sentiment and improvement in financing.
- Expect November-December sales to be better than last year.
- Expect pre-buying to happen in the January-February period.