India car sales fall 2.55 percent in October, industry sales down 3.84 percent

The festive season cheer failed to pep up the Indian automotive industry's sales and despite a spike on Dhanteras day (October 21), October 2014 numbers have skidded with overall domestic sales down 3.84 percent. Usually, carmakers are bullish of a step up in retail sales by 10-15 percent at this time. All vehicle segments put together, Indian automobile OEMs sold a total of 1,787,146 units compared to the 1,858,594 units sold in October 2013.

Earlier today, the Society of Indian Automobile Manufacturers (SIAM) announced that passenger car sales fell 2.55 percent to 159,036 units; the overall passenger vehicle sector as a whole, including UVs and vans, fell by 7.52 percent to 221,151 (see detailed table below).

Sales of passenger cars have fallen for the second consecutive month after last month’s (September) dip of one percent. In the passenger vehicle segment, some of the key brands in the top 10 were the Maruti Ciaz with 6,345 units sold and the Hyundai Elite i20 which had another super month with sales of 8,896 units.

In the commercial vehicle segment, there are indications of some sort of revival with medium and heavy vehicle sales up by 25.28 percent to 17,866 units. The dip in LCV sales continues with passenger carriers down 19.60 percent to 2,343 units and goods carriers down 12.72 percent to 31,756 units. CV sales aggregated 51,965 units, down three percent over October 2013 sales of 53,557 units.

In the two-wheeler category, motorcycles sales dropped 8.73 percent but scooter sales which rose by 10.89 checked the decline to just 3.61 percent. In terms of numbers, 1,008,761 units in the bike segment were sold as compared to 1,105,269 units in October 2013.

For the seven-month April-October 2014 period, passenger car sales are up just 3.03 percent while two-wheeler sales have ridden the good growth in scooter sales to post a 28.45 percent increase.

Sugato Sen, deputy director general of apex industry body SIAM, told Autocar Professional that the last decade had not seen a spike in passenger vehicle sales during the festive month though a spike is seen on the single Dhanteras day, considered auspicious for vehicle sales.  

The market sentiment that had picked up after the extension of excise duty cuts on various categories of vehicles enabling the sales graph to clock positive growth for five months post April is now back to a downslide since last month. Sen attributes the receding fortunes of the passenger vehicle segment to two key reasons –inadequate GDP growth including growth in economy which in turn rests on realty upsurge, opening of the mining sector as also generation of more employment. All attributes are inter-related to sustain a positive market sentiment and increase in consumer purchases.

Surprisingly, the dark horse during October was overall auto exports that were up by 18.64 percent.  April-October 2014 exports were slightly better at 19.80 percent. Key drivers were M&HCVs, three-wheelers and two-wheelers. 

Commercial vehicles, three-wheeler and two-wheelers exports grew by 13.93 percent, 15.33 percent and 26.80 percent respectively while passenger vehicles declined marginally by 0.06 percent during April-October 2014 over the same period last year.

Sen says this is due to the transition of export markets from Europe to non-European geographies. M&HCV domestic sales have fared better than LCVs as truckers are buying new trucks in anticipation of the turnaround. Thereafter, growth in LCVs will follow but overall SIAM is hopeful of passenger vehicles clocking a low single-digit growth this fiscal. The overall industry will hover in a similar range as well.

In the commercial vehicle segment, there are indications of some sort of revival with medium and heavy vehicle sales up by 25.28 percent to 17,866 units. The dip in LCV sales continues with passenger carriers down 19.60 percent to 2,343 units and goods carriers down 12.72 percent to 31,756 units. CV sales aggregated 51,965 units, down three percent over October 2013 sales of 53,557 units.

In the two-wheeler category, motorcycles sales dropped 8.73 percent but scooter sales which rose by 10.89 checked the decline to just 3.61 percent. In terms of numbers, 1,008,761 units in the bike segment were sold as compared to 1,105,269 units in October 2013.

For the seven-month April-October 2014 period, passenger car sales are up just 3.03 percent while two-wheeler sales have ridden the good growth in scooter sales to post a 28.45 percent increase.

One silver lining in the overall industry is on the export front with sales of all automotive segments up 20 percent in October alone. Passenger vehicle exports were up 5.81 percent while two-wheeler shipments grew 9.35 percent to 184,629 units, up from 168,846 units.