Auto companies show signs of recovery, increase dispatches by 13%

Country's largest carmaker Maruti Suzuki India (MSI) reported a 30.8 per cent increase in total sales at 1,60,442 units in September.
Automobile manufacturers showed significant signs of recovery as they dispatched 13 per cent more vehicles to dealers in September as compared to the same period last year.


Tractor sales also increased, with largest tractor player Mahindra & Mahindra (M&M) selling 18 per cent more farm equipment — indicating that a good monsoon is driving the rural economy.


“Retail demand continued to be buoyant backed by a very good monsoon, higher kharif acreage, and continued government support, including higher minimum support prices for key crops. We are looking forward to a robust demand for the festive season ahead,” said Hemant Sikka, president, farm equipment sector, M&M.


However, dealers and analysts said the numbers could be buoyed by the companies’ effort to boost inventory ahead of the festive season and a real picture of recovery will emerge only after the festive period is over.


The country's largest carmaker Maruti Suzuki India (MSI) reported a 30.8 per cent increase in total sales at 1,60,442 units in September. The company had sold 1,22,640 units in September last year, MSI said in a statement.


Sales of entry-level cars boosted the numbers for Maruti. Sales of mini cars comprising Alto and S-Presso stood at 27,246 units as compared to 20,085 units in the same month last year, up 35.7 per cent.


Two-wheeler sales showed the steepest increase, with largest two-wheeler maker Hero MotoCorp deciding that it can afford to hike the price of its products by 2 per cent. The company recorded its highest sales in a single month in the calendar year of 2020. “With the peak festival season coming up in the months of October and November, Hero MotoCorp remains cautiously confident of achieving yet another benchmark in post-Covid retail sales with the help of positive consumer sentiments and continued government policy support,” Hero said.


Commercial vehicles, however, remained under pressure compared to last year but improved sequentially, primarily led by sales of light and intermediate vehicles.


Analysts said the higher-than-average rainfall and increased kharif sowing drove demand for tractors and entry-level motorcycles. Yet, easing restrictions in urban areas, besides favourable base and inventory filling, led to higher passenger vehicle sales than two-wheelers during the month, they said.

“We expect festive season sales to be similar to last year for passenger vehicles and two-wheelers. We expect strong wholesales in September and October, followed by normalised level of volumes from November onwards,” said Kapil Singh, research analyst at Nomura.


September sales numbers also put Kia Motors India firmly in the Indian auto market, with the company recording its highest monthly sales in the month 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 per cent year-on-year to 18,676 units, making it the fourth largest four-wheeler seller surpassing M&M.


BMW also said on Thursday it would increase prices of its model range in India by up to 3 per cent from next month.


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