Car sales surge 36% in August on low base

Passenger vehicle makers dispatched 4.5 lakh units in August, a YoY growth of 36 percent, as they stocked dealer networks ahead of the festive season, even as executives cautioned that the pace of growth will moderate in the coming months due to last year’s high base.The festive season begins with Navratri in North India, which starts from October 11 this year, and stretches through Diwali and beyond.The high double-digit growth in August comes over last year’s weak base of 3.3 lakh units, when sales had fallen as customers deferred purchases in anticipation of a cut in goods and services tax (GST).The country’s largest carmaker Maruti Suzuki said the industry is set to repeat last year’s pattern, with growth skewed unevenly across the first and second halves of the fiscal year.“So far, I think we are having good tailwinds [in terms of festive season demand]. We don’t see any headwinds there,” said Partho Banerjee, senior executive officer for marketing & sales at Maruti Suzuki, at a virtual press conference. “Obviously, the growth cannot be to the tune of 35 percent because there is a base effect.”Also Read: How Indian are India's electric vehicles?“This year will also be a year of two halves,” Banerjee said.He was alluding to last year when demand was subdued in the first half before a GST rate cut—which was announced on August 15 and took effect from September 22—reignited consumer demand.GST on most cars was reduced from about 28 percent to a flat 18 percent. Sales surged in the months that followed, prompting the industry to call last year a “year of two halves”: Pre- and post-GST cut.For the current fiscal year, Banerjee said he expects industry volumes to expand by at least 10 percent.In August, Maruti’s domestic sales rose 34.8 percent to 1.76 lakh units, from 1.31 lakh units a year earlier. Total sales—which include domestic sales of light commercial vehicles, sales to other original equipment manufacturers and exports—climbed to 2.19 lakh units from 1.8 lakh units, an increase of about 21.7 percent.That figure, however, was down from an all-time high of 2.41 lakh units in July, a dip the company attributed to fewer production days rather than any softening in demand.“If you compare July with August, there is a difference of almost three working days,” said Banerjee.Also Read: India's EV white space: Where the next big opportunities lieHe said the company’s average daily production throughput was close to 2 lakh units, or about 8,000 vehicles a day, meaning the shortfall added up to roughly 24,000 units. “We don’t have any vehicle in our factory, and our network stock is also already at 16 days,” he said, pointing to pending bookings of close to 1.8 lakh units as a sign of underlying demand strength.Asked whether the company planned festive discounts, Banerjee said pricing decisions would depend on local conditions. “Discounts are market-driven and vary from market to market.”Maruti’s exports declined 7.4 percent to 33,844 units from 36,538 units as global shipping constraints weighed on the overseas business. “There are some concerns on ship availability. Vehicles are lined up at ports,” said Rahul Bharti, senior executive director at Maruti Suzuki. “The problem is likely to continue for a while.”Bharti said the company’s geographic spread would help cushion the impact. “Fortunately, we are quite diversified. We are exporting to more than 120 countries,” he said. “I believe our exports will be fairly resilient.”Tata Motors Passenger Vehicles maintained its number 2 spot in August, with combined domestic and international sales of 67,753 units, up 56 percent from 43,315 units a year earlier.At Hyundai Motor India, total sales (domestic and exports combined) rose 8.8 percent to 65,796 units. It sold 54,396 units in the domestic market, up 23.6 percent YoY.“Our August domestic sales of 54,396 units (+23.6 percent YoY), the highest-ever figure for any August month, reflect the popularity of Hyundai’s versatile product portfolio,” said MD & CEO Tarun Garg.Mahindra & Mahindra said utility vehicle sales in the domestic market rose 50 percent to 59,257 units, while total UV sales including exports reached 61,167 units. Domestic commercial vehicle sales grew 22 percent to 27,415 units. Overall vehicle sales, including exports, rose 42 percent to 107,648 units.“Demand continues to remain strong across our portfolio, with the updated Scorpio-N and BE 6 SPORTEQ receiving strong market response from customers. We look forward to building on this momentum during the festive season,” Velusamy R, president, automotive business at Mahindra & Mahindra, said in a statement.Hyundai’s sister company Kia India dispatched 29,042 units in August, up 48.1 percent from 19,608 units a year earlier, marking the company's best-ever August wholesale performance since its launch in the country.JSW MG Motor India posted 14 percent year-on-year growth, with wholesale sales of 7,508 units, as the company continued to build momentum across both its internal combustion engine and new energy vehicle lines.Honda Cars India reported total sales of 7,508 units, up about 10.8 percent from 6,774 units a year earlier. Domestic sales rose 40 percent to 5,385 units from 3,850 units, while exports fell about 27.4 percent to 2,123 units from 2,924 units.“August delivered a strong sales performance with 40 percent growth in domestic sales driven by robust festive demand starting from Onam and good response to New City and ZR-V,” said Kunal Behl, vice president, marketing & sales at Honda Cars India. “We remain optimistic of retaining this momentum and building on the strong customer response across our portfolio.”Renault India reported domestic wholesales of 2,842 units for the month. The company's cumulative domestic wholesales for the January-August period stood at 31,979 units, up more than 47 percent from 21,621 units in the same period last year, as it widens its portfolio across petrol, CNG, hybrid and electric powertrains under its futuREady strategy, which envisages seven models across multiple powertrain options.The two-wheeler segment also logged strong gains ahead of the festive period.TVS Motor Company reported total sales of 6.17 lakh units, up 21 percent from 5.10 lakh units a year earlier. Its two-wheeler sales alone rose 21 percent to 5.91 lakh units, with domestic two-wheeler sales up 18 percent at 4.34 lakh units. Electric two-wheeler sales more than doubled, surging 137 percent to 59,453 units from 25,138 units. International business grew 29 percent to 1.74 lakh units, while three-wheeler sales rose 34 percent to 25,103 units.Honda Motorcycle & Scooter India recorded total sales of 5.79 lakh units, up 8 percent from 5.34 lakh units a year earlier. Domestic sales rose 8 percent to 5.17 lakh units from 4.81 lakh units, while exports increased 15 percent to 0.61 lakh units from 0.53 lakh units.Hero MotoCorp reported total dispatches of 5.68 lakh units, up roughly 2.7 percent from 5.53 lakh units a years earlier. The company said retail momentum was stronger, up 19 percent over the previous year.Bajaj Auto posted a 28 percent rise in total sales to 5.35 lakh units from 4.17 lakh units. Domestic two-wheeler sales rose 10 percent to 2.01 lakh units from 1.84 lakh units, while exports in the segment jumped 53 percent to 2.41 lakh units from 1.57 lakh units.VE Commercial Vehicles, the Volvo Group and Eicher Motors joint venture, reported sales of 8,434 units, up 17.7 percent from 7,167 units a year earlier, comprising 8,162 units of the Eicher brand and 272 units of the Volvo brand.