Nascent Revival In India Auto Sales Gathers Momentum In September 2020

The nascent revival in India's auto sales gathered momentum in September 2020 as the nation's biggest automakers posted double-digit gains in the number of vehicles they dispatched to dealerships across the country.

India’s auto sector, which contributes more than 7% to the nation's gross domestic product, was grappling with a protracted slowdown when the coronavirus lockdown completely stalled operations. After a washout in April, sales revived in subsequent months as stay-at-home restrictions eased.

While factory-gate shipments—a measure of auto wholesales—of Maruti Suzuki India Ltd. rose 31% year-on-year in September, Hero MotoCorp Ltd. recorded its highest monthly sales in 2020 so far. Their closest competitors weren't far behind—Hyundai Motor Co. Ltd.'s India sales rose by nearly a quarter and Bajaj Auto Ltd. dispatched 10% more motorcycles to its dealerships in India and abroad.

But the surge in wholesales in unlikely to reflect in retail sales because according to the Hindu calendar, September and half of October this year is deemed inauspicious for vehicle purchases, says a report by brokerage Prabhudas Lilladher.

Nevertheless, automakers have used this period to stock up dealerships, anticipating demand during the festive season that follows. Inventory levels across segments rose to 35-45 days last month as compared to 20-30 days in August, the report stated. This was corroborated by research reports of Motilal Oswal and Dolat Capital.

Here's a look at the auto sales in September 2020, as reported by the companies, in year-on-year terms:

Overall sales of Bajaj Auto Ltd. rose 10% year-on-year to 4,41,306 units in September 2020, according to an exchange filing on Thursday.

While domestic sales—including two-wheelers and three-wheelers—rose 6% to 2,28,731 units, exports increased 14% to 2,12,575 units.

In fact, this was the highest ever exports that the Chakan, Pune-based company has recorded, according to the exchange filing.

Total tractor sales of Escorts Ltd. rose 9.2% year-on-year to 11,851 units in September 2020, the agri-machinery maker said in an exchange filing on Thursday.

This was the best-ever September Escorts has had in terms of tractor sales.

• Domestic sales rose 8.9% year-on-year to 11,453 units.
• Exports rose 19.2% year-on-year to 398 units.

"The rural demand continues to remain positive led by lower base of last year, pent-up demand from Covid-19 related lockdowns, and fundamentally positive macroeconomic factors," Escorts said in the exchange filing.

The company is currently operating at peak capacity and remains optimistic on the upcoming festive-season demand.

Sales of Maruti Suzuki India Ltd. increased 30.8% year-on-year to 1,60,442 units in September 2020, India’s largest carmaker said in an exchange filing on Thursday.

This includes domestic sales of 150,040 units and 2,568 cars sold to other original equipment manufacturers. The company also exported 7,834 units last month. In the July-September quarter, the company sales grew 16.2% year-on-year on a low base.

• Total sales at 160,442 units versus 122,640 units a year ago.
• Domestic sales up 32% year-on-year at 152,608 units.
• Export up 9% year-on-year to 7,834 units.

Segment-wise break-up of Maruti Suzuki sales:

• Sales of small cars (Alto, S-Presso) rose 35.7% year-on-year to 27,246 units.
• Sales of compact cars (WagonR, Swift, Celerio, Ignis, Baleno, Dzire, Tour S) rose 47.3% year-on-year to 84,213 units.
• Sales of mid-sized cars (Ciaz sedan) fell 10.6% year-on-year to 1,534 units.
• Sales of utility vehicles (Gypsy, Ertiga, S-Cross, Vitara Brezza, XL6) rose 10.1% to 23,699 units.
• Sales of vans (Omni, Eeco) grew 12.8% year-on-year to 11,220 units.
• Sales of LCVs (Super Carry) rose 4.0% year-on-year to 2,128 units.

MG Motor India Pvt. Ltd. has recorded 2.72% decline in its September retail sales at 2,537 units. The company had sold 2,608 units a year ago.

"While the fresh booking trend continues to grow steadily for MG Hector and ZS EV, the retail sales were severely impacted in September due to Shraad and Adhik Maas," said Rakesh Sidana, director (sales) at MG Motor India, in a statement. The wholesale figures were much more than retails in anticipation of the upcoming festive season, he added.

"Although the challenges continue in overall economy and supply chain, our teams are doing their best to overcome these, and we are looking forward to festive season and the launch of Gloster this month," Sidana said.

Sales of Mahindra and Mahindra Ltd. tractors outpaced utility and commercial vehicles for the fifth straight month in September, an exchange filing showed Thursday.

At 43,386 units, the company reported 17% year-on-year rise in total tractor sales. Sales of SUVs and trucks, fell 17% from a year ago to 35,920 units.

Mahindra Auto Sales: Key Highlights

• Domestic auto sales fell 16% year-on-year to 34,351 units.
• Total exports declined 41% year-on-year to 1,569 units.
• Sales of utility vehicles rose 4% year-on-year to 14,857 units.
• Sales of commercial vehicles remained more or less flat at 18,907 units.

"Inquiry and booking levels in September were significantly higher compared to the previous months, both for UVs and SCVs," Veejay Ram Nakra, chief executive of Mahindra's automotive division, said in the exchange filing.

Mahindra Tractor Sales: Key Highlights

• Domestic tractor sales rose 18% year-on-year to 42,361 units.
• Exports increased 6% year-on-year to 1,025 units.

"Retail demand (for tractors) continued to be buoyant, backed by a very good monsoon, higher kharif acreage and continued government support, including higher minimum support price (MSP) for key crops," Hemant Sikka, president of Mahindra's farm equipment division, said in the exchange filing.

Sales of Toyota Kirloskar Motor India Pvt. Ltd. fell 20.45% year-on-year to 8,116 units in September 2020, according to a statement on Thursday. The automaker, however, said its wholesales grew 46% as compared to August, when it had sold 5,555 units.

"We are seeing demand pick up and a lot more confidence in our dealers, thereby witnessing 14-18% growth in orders when compared to the last few months," Naveen Soni, vice president (sales and service) at Toyota Kirloskar Motor, said in the statement. “September was our best month so far, ever since the pandemic hit us in March 2020.”

Toyota has restarted in two shifts manufacturing at its factories, Soni said.

Going foward, Toyota expects its Urban Cruiser compact SUV, based on Maruti Suzuki’s Vitara Brezza, to drive its festive season sales. “We have got a very good response from our customers and the market, ever since we opened the bookings for Urban Cruiser,” Soni said.

Also Read: Toyota Halts India Growth, Blaming ‘We Don’t Want You’ Taxes

Total sales of Ashok Leyland Ltd. fell 5% year-on-year to 8,344 units in September 2020, according to an exchange filing on Thursday. The truck maker had sold 8,780 units in the year-ago period.

• India sales were flat at 7,847 units compared to a year ago.
• Exports fell 46% year-on-year to 497 units.

And while overall truck sales declined 1% year-on-year in September, the company sold 76% fewer buses in the month gone by. Light commercial vehicles were the outlier, though, as their sales rose 17% year-on-year to 4,702 units.

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Total sales of VE Commercial Vehicles Ltd. fell 7.3% year-on-year to 3,506 units in September 2020, parent Eicher Motors Ltd. said in an exchange filing on Thursday.

The commercial-vehicle maker had sold 3,784 units in the year-ago period.

• Domestic sales fell 6.4% year-on-year to 2,940 units.
• Exports of Eicher's trucks and buses fell 4.3% to 510 units.
• Exports of Volvo trucks fell 49.5% year-on-year to 56 units.

On Thursday, Eicher Motors’ shares fell 0.19% to Rs 2,196.60 apiece on the BSE even as the benchmark Sensex ended the day 1.65% higher at 38,697.05 points.

Total sales of Hyundai Motor India Pvt. Ltd. rose 3.8% year-on-year to 59,913 units, according to a statement on Thursday. Wholesale shipments by the Indian arm of the South Korean carmaker stood at 57,705 units in the year-ago period.

• Domestic sales rose 23.6% year-on-year to 50,313 units.
• Exports fell 43.5% from a year ago to 9,600 units.

“The green shoots of recovery are clearly visible with sales improving on month-on-month as well as year-on-year basis,” Tarun Garg, director of sales, marketing and service at Hyundai Motor India, said in the statement. “We are confident that the coming festive season will drive the market on a steady recovery path with positive customer sentiments.”

Kia Motors India recorded its highest monthly sales in September 2020, on the back of bumper demand for its latest offering—the Kia Sonet Compact SUV.

Total sales of the South Korean carmaker's Indian arm rose 147% year-on-year to 18,676 units. The Sonet, which was launched on Sept. 18, accounted for 9,226 of those. Kia in fact claims that the compact SUV is already the bestseller in its category. The Seltos, Kia’s first car for the Indian market, continued its strong performance, with 9,079 units sold.

“We have been constantly elevating our production capacity to meet pre-covid level of operations, and till now, have been successful in doing this too," Kookhyun Shim, managing director and chief executive officer at Kia Motors India, said in a statement. "This not only allows us to contribute to the revival of the Indian auto industry but also helps us bring notable growth for our business and bring down the waiting period of our vehicles.”

Kia Motors is now looking to export from India and has identified over 70 markets for the same. It’s targeting pushing 50,000 units overseas within the next 12 months.

Hero MotoCorp Ltd. recorded its highest monthly sales for the ongoing calendar year in September 2020. India's largest two-wheeler maker sold 7,15,718 units last month, indicating 16.97% growth over the year-ago period.

• Motorcycle sales rose 18.3% year-on-year to 6,60,948 units.
• Scooter sales rose 2.35% year-on-year to 54,770 units.
• Domestic sales rose 16.11% year-on-year to 6,00,509 units.
• Exports rose 57.54% year-on-year to 18,425 units.

The company is now operating at nearly 100% production capacity with almost all customer touchpoints open.

Total domestic sales of Tata Motors Ltd. rose 37% year-on-year to 44,444 units in September 2020, according to an exchange filing Thursday. The automaker had sold 32,376 units in the year-ago period. The figures include sales of passenger as well as commercial vehicles.

• Commercial vehicle sales fell 11% from the year ago to 24,910 units.
• Passenger vehicle sales rose 163% year-on-year to 21,199 units.

On quarterly basis, Tata Motors sales rose 112% year-on-year to 54,794 units in the April-September 2020 period.

Total sales of Royal Enfield rose 1% over the year ago period to 60,041 motorcycles in September 2020, parent Eicher Motors Ltd. said in an exchange filing on Thursday. The company had sold 59,500 units a year ago.

While domestic sales rose 2% year-on-year to 55,910 units, exports fell 11% from the year ago to 4,131 units, the statement showed.

Sales of 350 cc motorycles—the Classic, Bullet and Thunderbird series—rose 4% to 54,144 units. The company's bigger motorycles—the Himalayan, Interceptor 650 and Continental GT 650—lagged as their sales fell 21% to 5,897 units.

Total sales of TVS Motor Co. Ltd. rose 3.76% over the year ago to 3,27,692 units in September 2020, according to an exchange filing on Thursday, The Chennai-based automaker, which primarily makes two-wheelers and three-wheelers, had sold 3,15,796 units in September 2019.

• Total two-wheeler sales rose 4.16% year-on-year to 3,13,332 units.
• Local two-wheeler sales fell marginally from a year ago to 2,41,762 units.
• Exports rose 19% year-on-year to 85,163 units last month.

On Thursday, TVS Motor shares rose 2.49% to Rs 480.10 apiece on the BSE while the benchmark Sensex ended the day 1.65% higher at 38,697.05 points.

Total sales of Honda Cars India Pvt. Ltd. rose 9.7% over a year ago to 10.199 units in September 2020, according to a statement released on Thursday. The company had sold 9,301 units in domestic market in September 2019.

Exports stood at 170 units last month.

Honda Cars India “saw an uptick in our dispatches in line with our plan and reaffirms slow but steady path to recovery, both for demand and supply,” Rajesh Goel, senior vice president at the Indian arm of the Japanese carmaker said in the statement. “This was also our preparation for the festive season, where we expect the market to gain further momentum...”

The need for personal mobility—in light of the coronavirus pandemic—will get reflected in industry volumes in the coming months, Goel said.