New Delhi: In a run up to the major festivities, vehicle dispatches from OEMs to dealers during October 2023 were on the higher side across all the segments, but for tractors. Strong rural demand and unfettered production boosted the wholesales to a great extent.
As the final phase of the 2023 festive season is drawing to a close with Dhanteras and Diwali falling in the first fortnight of November, OEMs are pushing the inventory in anticipation of a strong demand and record-high festive season sales. This may make October as the last month of big wholesales with OEMs set to re-align their inventories after the festive season.
The following is a segment-wise report of vehicle dispatches during October 2023.
Passenger Vehicles
Total domestic passenger vehicle (PV) wholesales in October grew 16% to 3.91 lakh units, as against 3.36 lakh units in the same month last year.
Shashank Srivastava, Senior Executive Officer- Marketing & Sales, Maruti Suzuki, said every month this year has been the highest ever, due to which this year looks better so far.
He said the stock level with the dealers is at 3.35 lakh units, which is roughly 30 days of inventory. “This is quite a high stock after a long time. In fact, this stock was last seen in the period September to November of 2018, that is five years back.”
“The first 15 days of November are auspicious especially for the northern and central part of the country and November will depend on how the first 15 days of retail happen. If the retail is a little lower than expected, then we might see an impact on the wholesale number going forward from November because the stock is quite high,” Srivastava said.
As per VAHAN, over 3 lakh passenger cars (each month) have been registered in the past three months. These numbers indicate a healthy recovery for the PV segment in India, with total car sales in the first 10 months of the calendar year standing at around 3.4 million units, registering an approximate 9% YoY growth.
Overall, October had a marginal month-on-month growth (about 6% in registrations). This trend indicates lower dispatches by OEMs to dealers from November onwards to re-align supplies, as demand may be moderate post the festive season, Saket Mehra, Partner, Grant Thornton Bharat, said.
“We may anticipate discounts on entry-level cars later this year, coupled with decreased production for these models, to match market demand,” Mehra said.
SUVs have been the demand drivers this season. In the month of October, the category contributed 50.7% to the total domestic sales, with hatchbacks at 29% and sedans down to 8.1%.
Maruti Suzuki projects the industry volumes for FY 2023-24 to be in the range of 41 lakh to 41.3 lakh. The automaker now estimates the YoY growth between 5.5% to 6.5%, lowering the projections from 5% to 7% earlier.
Tarun Garg, COO, Hyundai Motor India said the supply situation is back to full normalcy and the networks are geared up for deliveries.
Veejay Nakra, President, Automotive Division, M&M, said, “In October, we clocked the highest ever volumes at 80,679 vehicles, a growth of 32%. Both SUVs and CVs individually achieved highest ever volumes for the third consecutive month at 43,708 and 25,715 vehicles respectively. While the strong festive demand should help continue our growth momentum in November, we will keep a close watch on select supply-related challenges.”
Hardeep Singh Brar, National Head, Sales & Marketing, Kia India, said the company has achieved its fourth-highest monthly sales in India during October this year.
The automaker sold 12,362 units of Seltos, 6,493 units of Sonet, followed by Carens with 5,355 units and EV6 with 141 units in the domestic market in October 2023.
Atul Sood, Vice President of Sales and Strategic Marketing, Toyota Kirloskar Motor, said October sales were mainly driven by the festive season push. “For us, sustained growth has been coming from across every segment where Toyota has its presence,” he added.
Yuichi Murata, Director, Marketing and Sales, Honda Cars India, said that there is a strong demand during the festival period. As we near the auspicious celebrations of Dhanteras and Diwali, our dealerships are focusing on maximising deliveries to the customers.
MG Motor India’s sales of EVs continue to contribute about 25% of its total sales. The carmaker said its festive sales are encouraging on the back of attractive customer offers across models.
Two-wheelers
All the two wheeler OEMs registered growth on a YoY basis. Market leader Hero MotoCorp reported a double digit growth in domestic sales, with both the motorcycle and scooter segments in green. However, the demand in the commuter segment is a concern.
“Two-wheeler registrations experienced about 14% month-on-month growth induced by festive season sentiment, and gradual demand recovery in rural markets. These sales are expected to increase, with the introduction of new, premium models in the market as well as resurgence in electric two- wheeler sales after the reduction in FAME subsidy earlier this year,” Mehra of Grant Thornton said.
B Govindarajan, CEO, Royal Enfield, said, “With festive season right around the corner, we are thrilled to see the booming consumer sentiment. While our recently-launched Bullet 350 has been performing well, we are getting ready to launch the most awaited motorcycle of the year, next month. We are confident that our upcoming motorcycles and initiatives will propel our growth momentum further.
Commercial vehicles
Tata Motors, the largest commercial vehicle maker in the country, reported growth across all categories, except the SCV cargo and pickups, the largest contributor to its total domestic sales.
During October 2023, Ashok Leyland dispatched 9,411 units of M&HCVs and 6,348 units of LCVs.
Tractors
Hemant Sikka, President- Farm Equipment Sector, Mahindra & Mahindra, said, “Higher aggregate kharif production, higher MSP for key rabi crops and government’s continued support to the farm economy in H2 of this year, are leading to positive sentiments among farmers during the on-going festive season, supporting tractor demand.”
The festive season this year is delayed and spread across two months, hence October sales were slightly less than that in the same month last year. November, however, looks positive with key festivals in the first half of the month. Going forward, all macroeconomic factors remain positive and we expect the demand momentum to continue for the remaining part of this fiscal, Escorts Kubota said in a statement.
