Indian carmakers rejoice as festive consumer demand boosts PV sales in October

As we get into the thick of the festive season in October, Indian passenger vehicle manufacturers seem to have hit the jackpot as sales skyrocketed in the month with the top automakers in the country witnessing double-digit growth.

Low fuel costs, festival discounts, falling interest rates and fresh model launches all together seem to have worked in favour of the OEMs as they witnessed a surge in despatches.

The surprise interest rate cut of 50 basis points by the Reserve Bank of India just before the start of the month set the tone for the days to come and led to a spike in consumer demand. To bank upon the renewed interest, OEMs also introduced festive discounts and fresh models to lure customers, which further provided a boost to sales.

Sales in the first half of October were weighed down by the Shradhh period, a fortnight considered inauspicious for buying products, but picked up sharply in the second half with the onset of Navratri and Dussehra festivals.  

The festive season and fresh launches augured well for Maruti Suzuki as the domestic sales of the country’s largest carmaker grew a whopping 24.7% in October 2015 to 121,063 units against 97,069 units sold a year ago. This is also the company’s highest domestic sales in 2015 so far.

The carmaker saw growth in almost all segments, barring the mid-size segment, as dispatches rose significantly. Sales of Maruti Suzuki’s mini segment, which comprises of the Alto and the Wagon R, rose 5.2% to 37,595 units in the month.

Sales of compact cars, which include models like the Swift, Ritz, Celerio and Dzire, grew sharply by 37.7% in the month to 51,048 units. October also marked the inclusion of the much-awaited Baleno to Maruti’s compact segment. 

Demand for the Dzire Tour (for cabs and fleet operators) also remained strong and the company sold 3,418 units as compared to 1,408 units in October 2014.

Sales of the utility vehicles segment which comprises of Gypsy, Ertiga, Grand Vitara and the new S-Cross also rose significantly by 56.5% to 9,435 units. It is interesting to note that due to the slow off-take of the S-Cross, Maruti had started offering discounts of up to Rs 90,000 on the car last month.

On the downside, sales of the Ciaz sedan, which comes under the mid-size segment, slowed 7.8% to 5,890 units in October from 6,345 units a year ago. The company had introduced the Ciaz in October itself last year.

Sales of the vans segment, which comprise of the Eeco and the Omni, also rose by 30.8% to 13,677 units against 10,453 units a year ago.

On the export front, Maruti Suzuki saw sharp growth in October as the carmaker shipped 13,146 units, 90.4% higher than the previous year. As a result, total car sales for the company in October grew by 29.1% to 134,209 units.

October was particularly good for Hyundai Motor India as the Korean carmaker recorded its highest-ever domestic sales of 47,015 units and exports of 14,777 units with cumulative sales of 61,792 units for the month.

Commenting on the October sales, Rakesh Srivastava, senior VP (Sales and Marketing), HMIL, said, "Hyundai’s sales of 47,015 units are its all-time highest with an all-time high sales of the Grand i10 with 14,079 units and continued strong performance of the Creta and Elite i20/Active with 18,244 units. We expect the growth momentum to continue in the coming months with improving customer sentiments."

Hyundai Motor India currently has 10 car models across segments – Eon, i10, Grand i10, Elite i20, Active i20, Xcent, Verna, Creta, Elantra and Santa Fe. The company, which is India’s leading exporter, currently exports to around 85 countries across Africa, Middle East, Latin America, Australia and the Asia Pacific.

Honda Cars India reported the highest growth in sales among the top carmakers in the country with a whopping 52% rise in domestic sales of 20,166 units in October 2015 against 13,242 units in the corresponding month last year.

The City emerged as the company’s most sold car in the month with sales of 7,022 units followed closely by the Amaze with sales of 6,971 units. The new Jazz came in next with sales of 4,496 units. The company sold 820 Brios, 770 Mobilios and 87 CRVs in the month. 

The cumulative domestic sales of the company were also up and stood at 117,383 units during the April – October period as against 101,442 units for the corresponding period last year marking a growth of 16%.

Speaking on the company’s sales performance, Jnaneswar Sen, senior vice president – Marketing & Sales, Honda Cars India said, “The festive demand has led to a strong growth for HCIL during October where-in we recorded our highest monthly sales of this fiscal year.  We are thankful to our customers for their great response and support and hope to continue this momentum.”

Home-grown automaker Mahindra & Mahindra’s passenger vehicles division (which includes UVs, cars and vans) also reported a rise in sales to 24,060 units in October 2015 (October 2014: 20,255 units), a growth of 19% year on year.

Speaking on the auto sales performance for October 2015, Pravin Shah, president and chief executive (Automotive), M&M, said, “The advent of the festive season has provided the much-needed fillip for the auto industry especially on the back of the new launches of most manufacturers which has received an encouraging response. With the drop in interest rates and the fuel prices remaining benign, we expect the industry to maintain a good growth momentum going forward. At Mahindra, we are happy with our performance during October 2015, which has witnessed a positive growth of 20 percent backed by excellent response garnered from the recently launched TUV300 as well as other brands such as XUV500, Scorpio, Bolero and pickups. We are quite hopeful of this positive growth momentum continuing for the rest of the year.”

Tata Motors also reported year-on-year growth of 11% in passenger vehicles sales with 12,798 units, compared to 11,511 units a year ago. The automaker adopted the strategy of introducing special editions of its existing models to drive up sales.

The company introduced limited edition variants of its entire line-up of cars including celebration editions of the Bolt, GenX Nano, Safari Storme, and the Indigo. The company also introduced a special Zest Anniversary edition to mark one year of the Zest in the Indian market. Cumulative sales of passenger vehicles in the domestic market for the fiscal stood at 77,804 units, higher by 14% over last year.

Despite the onset of the festive season and reduced interest rates, Toyota Kirloskar Motor reported a decline in domestic sales in October. The automaker sold 12,403 units in the domestic market against 12,556 units, down 1.21% from a year ago. It exported 1,198 units thus selling a total of 13, 601 units in October 2015.

The company registered a cumulative growth of 9% by selling 119, 095 units in the domestic market from January to October 2015 as compared to 108, 863 units sold from January to October 2014.

According to the carmaker, the Etios series registered a cumulative growth of 12% from January to October 2015 when compared to the same period last year. This growth can be attributed to the overwhelming response received to the recently launched New Liva, it said.

Commenting on the sales performance, N Raja, director and senior vice-president, sales and marketing, said: "With the festive season on, we have seen a growth of 9% in our sales from January to October 2015 when compared to the same period last year. The Etios series has also seen a cumulative growth. The New Liva has received an overwhelming response from buyers. The sale of new Camry continues to grow and has already exceeded the total Camry sales in 2014. Camry Hybrid constitutes 90% of the total New Camry sales.”

Scandal hit automaker Volkswagen Group’s local arm, Volkswagen Passenger Cars India also reported de-growth in sales as uncertainty over the fate of Indian cars and product recalls marred the brand.

The automaker sold 3,255 units in the month, 30% lower than 4,663 units sold in October 2014. The company has still not notified whether its diesel cars sold in India are affected by the emissions cheating scandal and if a recall would happen. The brand has taken a hit with many customers opting for a wait-and-watch approach and despite festive offers and attractive finance schemes, dealers have seen lower footfalls at their showrooms.

While the carmaker’s cumulative sales in the January to October period were higher by 6.5% at 38,633 units, it may take some more time before sales pick up again for the German major.

Also Read: India Sales Analysis - September 2015