Festive demand puts car sales in top gear, volumes grow 23%

Volkswagen’s weak show continues; sales drop 30%

Carmakers had a festive bonanza in October, with top five automobile manufacturers seeing high double-digit sales growth rates.

The industry is estimated to have grown at a healthy rate of 23 per cent, if data for 10 companies are any indication.

The 10 companies (excluding Nissan and Fiat) are projected to have sold 260,838 units in October this year, compared with 211,882 units in the same month last year.

While a few companies have officially announced their sales data for the month, the others are expected to do so on Monday.

German carmaker Volkswagen, though, saw a second straight month of sales decline; its volumes fell 30 per cent in October, in spite of some efforts to push sales.

The world’s largest automobile company has since September been hit by a scandal related to the alleged fudging of emission data which triggered a massive recall of 11 million vehicles.

The company, which might be planning to recall vehicles in India as well, saw its sales declining 30 per cent in October after a 21 per cent drop in September.

The company had posted healthy growth till August this year.

Maruti Suzuki, India’s largest carmaker, sold 121,063 units of vehicles in October, almost 25 per cent more than those in the same month a year ago.

The company is riding on two new products: The S Cross and the Baleno.

According to a Delhi-based Maruti Suzuki dealer, retail sales rose 15 per cent in the month because of Navaratri, considered by Hindus an auspicious period for buying products. “Usually, sales dip sharply between Navaratri and Diwali every year.

But this year, we see a largely stable demand.”

There might have been a massive pick-up during the second half of the month, given that the Shraddh period, a fortnight considered inauspicious for buying products, would have had an impact on the first half sales of October this year.

Since car sales in October 2014 had not been affected by the Shraddh period, which fell in September last year, the October volumes point to a big growth.

Hyundai Motor India reported its highest monthly sales during October.

The Korean carmaker’s volumes grew over 24 per cent in the month to 47,015 units.

Rakesh Srivastava, Hyundai’s senior vice-president (sales & marketing), said festive demand growth in October this year was 15 per cent for the industry against mere 5 per cent last year.

“Hyundai will continue to see a growth rate exceeding 20 per cent owing to strong demand for our SUV Creta and i20”.

The company sold 7,225 units of Creta and a record 14,000 units of Grandi10.

Mahindra and Mahindra saw sales moving into a growth phase after several months of decline.

The sports utility vehicle maker sold 24,060 units in October, 19 per cent more than a year ago.

“The advent of festive season has provided the much needed fillip especially on the back of the new launches of most manufacturers. With the drop in interest rates and the fuel prices remaining benign, we expect the industry to maintain a good growth momentum”, said Pravin Shah, President & Chief Executive (Automotive) at the company.

Japanese carmaker Honda saw its sales zooming about 53 per cent to 20,298 units.

The factors like softening interest rate on vehicle loans, after the Reserve Bank of India lowered the repo rate by 50 basis points towards the end of September, improved sentiment.

Aggressive discounts and offers by carmakers also contributed to high volumes.

Car sales are likely to grow further in November, given that people will look to make purchases in the days before Diwali, which falls on November 11 this year.

“Raining discounts, coupled with new products and improving macro indicators, are creating a lot of excitement in the sector.

"We expect the current momentum to continue in the coming month on the back of Diwali,” said Amit Kaushik, country head (India) at JATO Dynamics, a UK-based automotive consulting and research firm.

Tata Motors also saw over 11 per cent jump in domestic sales during October.

Toyota, however, saw a marginal sales decline of one per cent.

The Japanese car maker has not launched any new product this year.

New launches worked well for Ford India, which saw its sales zooming 49 per cent, indicating a positive response to its two new launches -- the Aspire and the Figo.

French car maker Renault’s sales grew at a high rate of 92 per cent, mainly on the back of its new hatchback Kwid, which saw bookings of over 50,000 in less than a month of its launch.