Auto Sales In October 2022: Car, Two-Wheeler Sales In-Line, Tractors Defy Expectations

Automobile sales in October were largely in line with the expectations as passenger vehicles witnessed strong dispatches to dealerships, while two-wheelers continued to struggle.

While carmakers’ sales jumped significantly compared to the low base last year, the month-on-month comparison showed a declining trend.

The evident point of stress for automakers were exports, which dragged the companies relying heavily on the overseas markets. The muted performance of two-wheeler makers such as Bajaj Auto Ltd. and TVS Motor Co. can be partly blamed on the lower shipments to these foreign markets.

The tractor sales, however, defied analysts’ expectations with growth in dispatches for both Escorts Kubota Ltd. and Mahindra & Mahindra Ltd.. Analysts were expecting a fall compared with last year.

The world's largest two-wheeler maker Hero MotoCorp Ltd.'s total sales declined 17% year-on-year to 4,54,582 units, more than the analysts' expectation of a fall of over 14%.

Sales Highlights (YoY):

• Domestic sales fell 16.1% to 4,42,825 units.

• Exports slumped 41.8% to 11,757 units.

• Motorcycle sales declined 17% to 4,19,568 units.

• Scooter sales fell 16.7% to 35,014 units.

"During the 32-day festive season, which spanned from the first day of Navratras to the day after Bhai Dooj, the company posted a strong double-digit retail growth of 20% over the corresponding festive period of FY22, thereby strengthening its leadership in the domestic two-wheeler market and increase in retail market share," the company said in a statement.

Eicher Motors Ltd.'s total motorcycle sales in October rose 86% year-on-year to 82,235 units. The additional sales from the newly launched model Hunter 350 aided the growth in volumes.

Sales Snapshots (YoY):

• Sales of models with engine capacity up to 350cc doubled to 74,828 units.

• Sales of models with engine capacity exceeding 350cc rose 10% to 7,407 units.

• Exports rose 62% to 5,707 units.

TVS Motor Co.'s total two-wheeler sales rose just 0.9% year-on-year to 3,44,630 units as lower exports and muted motorcycle sales dragged the overall dispatches. The company missed analysts' estimates, which expected the two-wheeler sales to rise over 3%.

Sales Highlights (YoY):

• Domestic two-wheeler sales rose 7% to 2,75,934 units.

• Two-wheeler exports fell 17% to 68,696 units.

• Motorcycle sales fell 4.5% to 1,64,568 units.

• Scooter sales grew 20% to 1,35,190 units.

"In some international markets, there has been a slowdown due to macro economical factors," the company said in the exchange filing. "These are predominantly two-wheeler markets and hence, we have moderated dispatches in these countries."

The company said that retail sales improved in these markets in October, indicating higher dispatches in the coming months.

Mahindra & Mahindra Ltd.'s passenger vehicle dispatches to dealerships rose 60% year-on-year to 32,298 units in October. The sales, however, fell 6.4% month-on-month. Total tractor sales rose 11% to 51,994 units, comfortably beating analysts' estimates of nearly 6% fall in dispatches.

Sales Highlights (YoY):

• Domestic three-wheeler dispatches jumped 44% to 5,081 units.

• Sales of light commercial vehicles, with capacity between 2 T-3.5 T, rose 41% to 15,728 units.

• Domestic dispatches of tractors rose 11%, while exports fell 9%.

"Festive season kept the spirits high and led to very strong momentum in demand for tractors and farm machinery," Hemant Sikka, president-farm equipment sector at M&M, said in a statement.

Tata Motors Ltd.'s passenger vehicles dispatches rose 33% year-on-year to 45,423 units in October. However, the company's commercial vehicle sales declined 2% to 32,912 units.

Sales Snapshots (YoY):

• Total domestic dispatches rose 17% to 76,537 units.

• Sales of medium and heavy commercial vehicles rose 29% to 9,860 units.

• Dispatches of intermediate and light commercial vehicles fell 27% to 4,083 units.

• Electric passenger vehicle sales jumped 158% to 4,277 units.

Commercial vehicle maker Ashok Leyland Ltd.'s dispatches to dealerships rose 34% year-on-year to 14,863 units in October. The sales missed consensus estimates, which anticipated the growth at nearly 43%.

• Domestic dispatches rose 38% to 13,860 units.

• Domestic sales of medium and heavy commercial vehicles jumped 56% to 8,189 units.

• Light commercial vehicle dispatches rose 16% to 5,809 units.

India's largest carmaker Maruti Suzuki India Ltd.'s dispatches to dealerships rose 21% year-on-year to 1,67,520 units in October. The growth came on a low base as severe shortage of semiconductors had reduced production in the comparable period. The dispatches fell nearly 5% month-on-month.

Sales Highlights (YoY):

• Domestic dispatches rose 25.7% to 1,47,072 units.

• Sales in the mini and compact segment jumped 39.8% to 98,621 units.

• Utility vehicle dispatches rose 14.4% to 30,971 units.

• Exports declined 4.1% to 20,448 units.

Eicher Motors Ltd.'s commercial vehicle subsidiary VE Commercial Vehicles Ltd. reported a 4% year-on-year growth in dispatches to dealerships in October.

• Total Eicher trucks and buses sales rose 3.9% year-on-year to 5,911 units.

• Total domestic sales rose 14.2% to 5,555 units.

• Exports slumped 56.9% to 356 units.

Bajaj Auto Ltd.’s total dispatches to dealerships fell 13% year-on-year to 3,41,903 units in October. Weak wholesale sales in the overseas markets continued to weigh on the company’s dispatches, while domestic sales rose just 4% as the festival season failed to revive demand for the two-wheelers.

Sales Snapshots (YoY):

• Sales of two-wheelers in the domestic market rose 4% to 2,06,131 units.

• Two-wheeler exports fell 29% to 1,35,772 units.

• Total sales of commercial vehicles rose 20% to 53,335 units.

Escorts Kubota Ltd. continued to beat estimates in dispatches in October as sales rose 7.2% year-on-year to 14,492 units, the highest-ever monthly sales for the tractor maker. The tally was comfortably higher than analysts’ consensus estimates, which pegged the sales to fall over 14%.

• Domestic tractor sales rose 8.6% to 13,843 units.

• Tractor exports fell 15.2% to 649 units.

“Festive demand was good, led by above normal monsoon and higher water reservoirs level,” the company said in its exchange filing. All macroeconomic factors remained favourable for the industry for the coming Rabi season, but overhang of unabsorbed commodities inflation remains a concern, it said.

India's automakers are announcing their October sales figures today.

Sales in the month are expected to be a mixed bag as consensus estimates of three brokerages showed that demand in rural markets remained low. Strong demand for high-end passenger vehicles and premium two-wheelers was offset by muted sales of entry level cars, bikes, and scooters, along with a moderation in volumes of commercial vehicles, analysts said.

Here's a look at auto sales in October 2022, as reported by the companies: