Even as the industry remained hopeful of positive customer sentiments during the festive month, sales on the ground remained largely slow especially for PVs, with towering fuel prices and high insurance premiums holding back buyers.
While India Auto Inc's passenger vehicle (PV) segment was witnessing slow to negative growth through the Q2 of FY2019, sales in October, brought in some respite, with overall growth finally turning black.
Overall, the industry saw some respite for PVs, moderation in commercial vehicle (CV) sales and acceleration in the two-wheeler segment, which came on the back of good demand from the rural and semi-urban sectors.
The industry clocked overall sales of 2,494,426 units in the month, registering a growth of 15.33 percent (October 2017: 2,162,869). Where PVs cumulatively garnered sales of 284,224 units, their growth rate stood at a marginal 1.55 percent (October 2017: 279,877), bringing them into the black after a consecutive stint of three-months of de-growth in July (-2.71%), August (-2.46%) and September (-5.61%). Out of the total PV sales, passenger car sales remained flat at 185,400 units (October 2017: 184,706) and UV sales grew by 4 percent to close at 82,414 units (October 2017: 79,323).
However, the slowdown has been more of a relative decline than actual slump, as the PV segment had seen sales surging during the same period in 2017 owing to implementation of GST, thus, leading to creation of a high year-ago base.
“PV sales over the last three months have been low, largely because of a high year-ago base. It's largely an optical impact, where sales did not show a growth, even though the numbers were substantial,” said Vishnu Mathur, director general, SIAM, revealing the numbers at a press conference in New Delhi today.
“While growth in October is small at 1.55 percent, but it is still better than being in negative what the industry has seen until September. Having said that, the growth of PVs could have still been better, but a lot has happened over the last three months which has led to subdued market sentiments,” Mathur added.
Mathur referred to the critical depreciation in rupee, skyrocketing fuel prices and people losing money in investments in the last quarter, all of which have led to some uncertainty in the market.
“So, while the demand is there, conversion of that demand into sales has not happened because people are feeling that this is not the right time to make purchases,” Mathur explained.
On the other hand, sales with regard the CV space stood at 87,147 units (October 2017: 69,816), and moderated down to a much more realistic growth of 24.82 percent, over the 40 percent ballpark they had been hovering over the past months. Good infrastructural development continues to be the key growth driver for CVs with M&HCVs selling 30,832 units (October 2027: 26,181 / +17.76%) and LCVs selling 56,315 units (October 2017: 43,635 / +29.06%) in the month.
While two-wheelers did initially face a hiccup in their pickup in the last quarter, October saw sales accelerate with the segment garnering overall volumes of 2,053,497 units and growing a significant 17.23 percent (October 2017: 1,751,608). Where scooters sold 643,382 units in the month (October 2017: 571,431 / +12.59%), motorcycles went home to 1,327,758 buyers, posting a notable growth of 20.14 percent (October 2017: 1,105,140).
As the festive season continues into November too and with a range of new models introduced and set to be introduced at the start of the New Year, growth beckons the industry as it aims drive past the challenges to put out a good show by fiscal year end.