Strong festive demand in October helped carmakers register a seven-per cent volume growth in the domestic market, even as the largest player, Maruti Suzuki, reported low single-digit growth.
Second biggest player, Hyundai, and companies such as Tata Motors, Nissan and Volkswagen contributed. The industry’s single-digit growth in October came after a 20-per cent surge in September, when companies dispatched vehicles for stock building at dealerships for festive demand.
Maruti Suzuki reported a 2.2-per cent growth in the domestic market at 123,764 units last month, against 121,063 units during the same period a year ago. All its segments except utility vehicles and Ciaz declined in the domestic market last month. The company said output in October was impacted by fewer production days, owing to holidays.
"While month-on-month sales figures are impacted by short term factors like number of working days, availability, stock plan etc, the more accurate reflection of demand is visible for the festive season (August to October), when sales grew about 14 per cent, compared to last year," said R S Kalsi, executive director (marketing and sales).
Korean auto major Hyundai posted its best monthly volume in October and crossed a milestone of 50,000 units. "We did our highest ever monthly volume, breaching the 50,000 mark with contribution coming from all our models and without any new mass model launch in more than a year," said Rakesh Srivastava, senior vice-president (sales and marketing), Hyundai.
Tata Motors, which launched a hatchback Tiago early this year, registered domestic volumes of 16,311 units, its highest monthly volume in past four years. The October volume showed a 28 per cent y-o-y growth. "While we have been growing month-on-month, the festive season has further ushered in strong growth impetus for us. The Tiago continued to receive strong response and Zest retails were highest ever since launch, during this festive season," said Mayank Pareek, president (passenger vehicle) at Tata Motors.
Japanese auto major Nissan had a strong run in October, posting a growth of 88 per cent to 6,108 units. The company attributed this growth to redi-GO, its new hatchback. Volkswagen too showed strong growth of 70 per cent y-o-y, helped by its compact sedan, Ameo.
A number of companies including M&M, Honda, Renault and Ford did not announce numbers as Tuesday was a holiday. Of these, Renault is expected to have grown volumes sharply compared with October 2015. Toyota reported a decline in volume and its sales declined 6 per cent to 11,651 units last month. The company said its production was lower than planned due to festive holidays during the month.
The industry has seen a stronger festive demand this year, owing to factors like increased salaries of government employees due to Seventh Pay Commission and better sentiments in the rural markets due to normal rainfall. "Passenger cars and two-wheeler sales continue to grow. This is backed by positive customer sentiments and better in hand cash flows to support their discretionary spends. Overall we should see good growth this year in all the vehicle categories," said Abdul Majeed, partner at Price Waterhouse and an auto expert.