Auto sales remain buoyant in September with reports of a good festive season ahead
- Most auto companies reported strong sales in September, with Maruti Suzuki reporting a 100% jump.
- The passenger vehicles segment reported strong growth as chip shortage eased, but the long wait times for high-end variants remained.
- Analysts suggest the festive season ahead could be good, with expectations of a recovery in domestic demand.
AdvertisementThe cheer is back in the Indian automobile industry, with market leader Maruti Suzuki logging a 100% jump in sales this September. Hyundai and Tata Motors too reported strong double-digit growth during the month – while Hyundai reported a 38% jump in sales, Tata Motors’ overall sales surged 40%.
Passenger cars and multi-purpose vehicle segments doubled their sales year-on-year as chip shortage eased. Heavy commercial vehicles and tractors too witnessed a growth of over 30% in September.
“Passenger vehicle wholesales have doubled YoY due to easing chip shortages and strong demand. Commercial vehicle demand has remained stable, with Ashok Leyland outperforming its peers,” a report by Motilal Oswal said.
The report further adds that despite strong retail demand, the easing chip shortage has helped reduce waiting periods. This is a crucial positive development ahead of the festive season.
However, a Nomura report notes that the waiting period for top-end variants is still long despite easing supply chain bottlenecks.
|Particulars||Sep-22||Sep-21||YoY %||Aug-22||MoM %|
|UVs + MPVs||80,916||40,751||98.6%||74,826||8.1%|
Source: Motilal Oswal
The strong wholesale channel sales were expected by analysts, with Nomura stating that the early festive season will drive the sales numbers.
“With the festive season starting early this year on 26 Sep 22 (vs 7 Oct in 2021), we expect strong sales helped by channel pre-festive filling,” the research firm said in its report.
Two-wheeler segment demand hinges on the festive season, say analysts
Demand in the high-volume two-wheeler segment hinges on how the festive season plays out, according to analysts. The rural markets have a major influence on the 2W segment – and the festive season remains a key sales period for companies like Hero MotoCorp, TVS, Bajaj Auto, among others.
“The 2W segment demand hinges on the festive season, which seems to have received an encouraging start,” the Motilal Oswal report said.
And there’s some bad news in store for Hero MotoCorp, which not only lost its crown as the 2W leader to rival Honda, its sales also dropped 2%, with the rural areas contributing to the decline.
“While September usually sees this phenomenon MoM, the extent of loss in market share this time is alarming,” said a report by Elara Capital, noting that Hero lost 100-800 basis points across regions.
However, analysts at Motilal Oswal remain optimistic about Hero’s sales, saying that the expectations of domestic demand recovery will benefit the company.
Overall, two-wheeler makers have started building up 50-60 days of inventory ahead of the festive season.
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