Pent-up demand, attractive interest rates boost Oct auto sales

New Delhi/Chennai, Nov 2 (SocialNews.XYZ) Healthy off-take on the back of festive season, along with pent-up demand and attractive interest rates, accelerated major automobile players' year-on-year (YoY) and sequential sales numbers for October.

Analysts cited factors such as the preference for personal mobility over public transport due to the pandemic as another key reason for the upswing.

Amongst the major players, Maruti Suzuki's total sales rose 18.9 per cent to 1,82,448 units from 1,53,435 units sold in October 2019.

The domestic sales including sales to other original equipment manufacturers (OEM) stood at 1,72,862 units, 19.8 per cent higher on a year-on-year basis.

Exports, too improved in October, as the company sold 9,586 units overseas, higher by 4.7 per cent on a year-on-year basis.

Another auto major, Hyundai Motor India recorded its highest-ever monthly domestic sales in October at 56,605 units.

It reported a 13.2 per cent growth in its domestic sales compared to 50,010 units sold during October 2019.

Another auto giant, Tata Motors' domestic sales rose 27 per cent to 49,669 units from 39,152 sold during the corresponding period of 2019.

The total passenger vehicles segment of the company rose 79 per cent to 23,617 units from 13,169 units sold in October 2019.

"Tata Motors Ltd sales in the domestic and international market for October 2020 stood at 52,132 vehicles, compared to 41,354 units during October 2019," the company said in a statement.

However, auto majors such as Mahindra and Mahindra reported a fall of 14.5 per cent in its overall sales during October at 44,359 vehicles.

The company had sold 51,896 units in October last year.

The passenger vehicle segment of the company which includes utility vehicles, cars and vans recorded a 1 per cent growth in sales at 18,622 vehicles last month.

Its utility vehicle segment, however, witnessed a 3 per cent growth at 18,317 units in October 2020, compared to 17,785 vehicles in October 2019.

M&M's Chief Executive Officer, Automotive Division Veejay Nakra noted that for the company festive season has started on a positive note with deliveries and bookings being higher than last year.

"Going forward, this augurs well for a robust festive demand which in turn will help the industry in the short term," Nakra said.

Auto major Toyota Kirloskar Motor reported a 1.87 per cent YoY fall in its overall sales in October at 12,373 units. During the same period last year, the company had sold 12,610 units.

On a month-on-month basis, its sales clocked a growth of 52 per cent. In September 2020, the company had sold 8,116 units.

In contrast, the wholly owned subsidiary of Kia Motors Corporation, Kia Motors India registered its highest-ever domestic sales since its entry into the Indian market with 21,021 units sold in October 2020.

The company recorded a 64 per cent YoY growth.

"The latest game changer in the market, Kia Sonet, remains to be one of the preferred choices amongst Indian customers which found 11,721 happy homes last month," the company said.

Besides, the two-wheeler and commercial vehicle manufacturer TVS Motor Company said that it closed last month with a total sales of 394,724 units, logging a growth of 22 per cent.

The company said that it sold 394,724 units (382,121 two-wheelers, and 12,603 three-wheelers) in October 2020, up from 323,368 units (308,161 two-wheelers, 15,207 three-wheelers) sold in October 2019.

In terms of the two-wheeler segment, Hero MotoCorp recorded its highest-ever monthly sales in October at over 8 lakh units of motorcycles and scooters.

In total, it sold 8,06,848 units last month, 35 per cent higher than 5,99,248 units sold in October last year.

"A positive turnaround in customer sentiments, particularly for motorcycles across markets, continued government policy support and a credible resumption of supply chain, logistics and business operations have enabled the company to achieve record numbers during the auspicious festive period," the company said in a statement.

Another two-wheeler major Honda Motorcycle and Scooter India (HMSI) reported positive YOY sales growth in October, the third consecutive month in FY21.

"After breaching the 5 lakh unit sales level in September'20, Honda total two-wheeler sales closed at a higher level of 527,180 units with a 2 per cent growth over 517,845 units sold in October'19," the company said in a statement.

"Buoyed by increase in demand during festivals amidst slew of its new BS-6 models now available in the market, Honda's domestic two-wheeler sales were up 1 per cent to 494,459 units in Oct'20 compared to the 487,819 units sold in the same month last year."

Similarly, Yamaha Motor India group of companies announced that the total sales has increased by 31 per cent to 60,176 units in the month of October 2020 compared to 46,082 units in October 2019.

Additionally, the two-wheeler subsidiary of Suzuki Motor Corporation, Japan recorded 76,865 unit sales in October 2020.

It broke last year's festive record by registering a 3 per cent jump in October 2020 overall monthly sales as compared to the same month in the previous year.

The company sold 67,225 units in domestic market and exported 9,640 units in October 2020 amid the Covid-19 outbreak.

"A spectacular and energising month for the OEM both in PV and 2 wheeler segments showing a strong performance," said Sridhar V, Partner, Grant Thornton Bharat LLP.

"Two of the largest OEM in passenger vehicles have registered the highest volume ever. This is a combination of factors including the pace of the revival of the economy, new introductions, festival season amongst others."

Shruti Saboo, Associate Director, Corporates, India Ratings & Research, said: "As per data released, most of the OEMs reported year on year growth in sales volume in October 2020, particularly in PV and 2W segment with the start of festive season (Navratri) in October. While the rural segment continued to perform well, urban segment have also started to pick up."

"The increasing preference for personal mobility continued to support PV and 2W sales. Part of this sales is also reflective of adequate inventory build-up to cater to the demand anticipated during Diwali in November. In the PV segment, lower end cars continued to outperform the overall industry growth."

Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research said: "We continue to believe that higher demand expectations in the ongoing festive season, greater need to own personal vehicles and avoid public transportation along with higher rural incomes are driving growth in the domestic automotive sector at this point in time."

Shamsher Dewan, Vice President, ICRA said: "October marked the beginning of auspicious festive season in India and the pace of inventory restocking by OEMs reached its peak. Even as dealers remain cautiously optimistic about retail sales going into the festive season, the listed OEMs reported a 24 per cent YoY increase in their domestic sales volumes in October 2020."

"This indicates optimism regarding consumer sentiments, especially those in rural and semi-urban markets and continued preference for 2W as a personal mobility solution in urban areas. ICRA expects that sustainability of domestic demand would remain contingent upon the Covid-19 scenario following the festive season."

Source: IANS