|Owing to a slow pick-up in rural markets following the implementation of the goods and services tax (GST) and inventory correction made by the companies after supplying a record number of vehicles since July, the passenger vehicle segment reported a marginal decline in October. This is the first time that the car market witnessed a decline in dispatches since June when carmarkers did not push inventory into dealerships before the introduction of the GST. Carmarkers also had a high base in the corresponding period since both Navratri and Diwali were in the same month last year. According to the latest data from the Society of Indian Automobile Manufacturers (SIAM) for October, the passenger car segment witnessed a 5.3% Y-o-Y decline in volumes to 1,84,666 units, while the same for the utility vehicles space increased 12.45% Y-o-Y to 79,323 units.|
Maruti Suzuki dragged the market during the month by registering only a 9.33% Y-o-Y increase in wholesale volumes – a modest one compared to the high double-digit growth reported by the company earlier. During the period, volumes in the small car segment of the company dipped by 4.2% Y-o-Y while the same for Ciaz – a mid-size sedan – dropped by 35.4%. “The festive season could have been a lot better, but this is not necessarily a reflection of the market sentiment. It is a temporary blip. The decline in sales is more to do with inventory correction by the manufacturers,” said Vishnu Mathur, director general of SIAM.
Barring Maruti, most of the other carmakers saw decrease in dispatches due to higher base in the corresponding period last year. Second-largest carmaker Hyundai’s volumes fell by 0.8%, while the same for Mahindra and Mahindra fell 6% Y-o-Y. Japanese carmaker Honda too witnessed an 8% fall in wholesale volumes despite healthy demand for the new City (a mid-size sedan) and WRV (a compact SUV). Wholesale volumes of Tata Motors also grew marginally by 1% Y-o-Y to 16,475 units.
“Last year, the festive season was only in October, and this year, it was spread over September and October. So there will be a high base effect from last year. Also, sales remain a little subdued in the month after Diwali and Navratri. It will pick up from the subsequent months,” said RS Kalsi, senior executive director, sales and marketing, Tata Motors, on the sidelines of the company’s results press conference.
Volumes in the M&HCV segment though continues to recover and increased marginally by 0.8% Y-o-Y to 26,158 units, owing to a healthy demand for BS-IV vehicles of Tata Motors. The largest commercial vehicle maker reported a growth of 8% Y-o-Y to 11,391units. Chennai-based Ashok Leyland witnessed volume drop by 5%. In the two-wheeler segment, dispatches in the motorcycle segment decreased by 3.5% to 11,04,498 units due to the high base. Hero MotoCorp volumes during the period declined by 1%, while the same for Bajaj Auto declined by 4.8%.
Volumes in the scooter segment stayed flat at 5,71,431 units, as the leading manufacturer, Honda Motorcycles and Scooters India, reported a 7% Y-o-Y decline in domestic dispatches.