Car sales in September rise on new launches, festive season demand

Mumbai: Indians purchased newly launched cars in September, a period that coincided with the celebrations of the Hindu festivals of Navratri and Dusshera and considered an auspicious time for purchases, according to monthly sales data released by automakers.

Sales are expected to remain buoyant in the current month as Dhanteras and Diwali, which fall on 17 and 19 October, respectively, are also considered auspicious for purchases of consumer durables and automobiles.

However, volumes are expected to moderate once the festive demand dries up from November and weak economic cues weigh down sentiments.

To some extent, the re-stocking trend which took effect in August after the implementation of the goods and services tax (GST)  also led to higher despatches.

Ahead of the implementation of GST, several firms had liquidated stocks.

Auto makers in India count despatches to dealerships as sales.

Driven by models such as the Baleno and Vitara Brezza, September sales at market leader Maruti Suzuki India Ltd rose 9.6% to 150,521 units from a year ago.

While sales of the company's old workhorses such as WagonR and Alto fell 13.3%, the Baleno propped up Maruti’s compact car model sales by 44.7%.

The Vitara Brezza, Maruti’s compact SUV model, increased utility vehicles sales by 8%.

The company also launched a new version of the S-Cross, its premium SUV on Sunday with prices starting from Rs8.49 lakh up to Rs11.29 lakh (ex-showroom, New Delhi).

In a statement, Kenichi Ayukawa, managing director and chief executive at Maruti Susuki India, described the S-Cross, in its newest form as “an important milestone” in Maruti's journey of transformation.

Led by  the new generation Verna, of which it has sold 6,000 units since its launch, Hyundai Motor India Ltd increased sales to a record 50,028 units, up 17.4% from a year ago.

Rakesh Srivastava, director sales and marketing at the firm, alluded the good sales performance of last month to “the multiplier effect of phenomenal performance” of the Verna along with strong pull for existing models including the Creta, Elitei20, Grand i10, this festive season.

Auto sales have risen despite an increase in cess which was followed by a price hike on premium models, rising fuel prices and weak economic cues.

But sales are likely to moderate from next month, said Abdul Majeed, auto practice leader at PwC India. “Economic growth has slipped and those in the SME sector are still reeling under the impact of note ban and GST implementation, this will impact purchase in the months ahead,” said Majeed.

India's economic growth fell to a three-year low of 5.7% in the June quarter.

Aided by its new models including the Tiago compact car, Tigor compact sedan and Hexa SUV, passenger vehicles sales at Tata Motors Ltd continued to climb, up 18% to 17,286 units from a year ago—the highest since November 2012.

Tata Motors launched the Nexon compact SUV last month which it said,  is expected to give sales a further momentum.

In a statement, Mayank Pareek, president (passenger vehicle business) at Tata Motors, said the Nexon “has received an encouraging response across markets”. With the ongoing festival season, the consumer sentiment continues to remain positive, he added.

Riding on the WR-V, which is now the second largest compact SUV model after the Brezza, sales at Honda Cars India Ltd too jumped 21% to 18,257 units from a year ago.

"With the festive purchase in full swing, our sales outlook for the season is very promising," said Yoichiro Ueno, president and chief executive at Honda Cars.

Sales at Toyota Kirloskar Motor Pvt. Ltd remained muted during the month, increasing only 2% to 12,335 units over the last year. The company attributed it to fewer production days. N. Raja, senior vice-president (sales and marketing) at Toyota Kirloskar, said that even though the company hiked the prices following an increase in GST cess, the waiting period for its models including the Fortuner and Innova has gone up.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.