PV industry sees tepid growth in November; SUVs, rural demand push sales

After a heady October, car makers had to contend with a headache in November as growth in car dispatches to dealerships petered to low single-digits for most manufacturers, with Hyundai’s figures even declining year-on-year (y-o-y). The numbers, however, were on expected lines, even as improved rural demand, and sales of SUVs and so-called new energy vehicles, mostly electric vehicles (EVs), beat the lull.

Market leader Maruti Suzuki India Limited (MSIL) dispatched 144,238 vehicles to dealers from its factories in the domestic market, registering 5.5% y-o-y growth.

Partho Banerjee, head of marketing and sales at MSIL, pointed out to Mint that last year, Diwali was in November, unlike this year, when it was in October. Inference: this November also paled when compared to the high base of last year’s festive November. The carmaker had reported record retail sales—sales to customers from dealerships—of 202,402 units this festive October.

This November, ongoing rural demand helped growth, with MSIL’s rural penetration increasing 220 basis points y-o-y to 48.7%. “The rural market response is better than the urban market,” said Banerjee. “But generally, in the month of November, we have seen that urban customers hold on their purchase decision for December.”

SUV sales also grew for Maruti, with the segment contributing 29% to its overall sales in November. In the beginning of the financial year, it was 25.2%.

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Maruti is also betting on growing CNG sales, which crossed the 400,000 mark in the April-November period. Sales have grown 23.5% y-o-y and CNG’s share of total sales stands at 34.4%. “Last year, our full financial year number was around 4.8 lakh (480,000),” Banerjee said. The company is hopeful of touching the 600,000 mark in CNG sales by the end of the financial year.

Premium hatchback Baleno was the top model for Maruti, with 16,293 units dispatched in November, followed by Ertiga, Fronx and Brezza.

Overall industry sees slow growth

Industry sales for November are estimated to be around 350,000 vehicles, a 3.8-4% y-o-y growth, Banerjee said. This is in line with industry body Society of Indian Automobile Manufacturers’ (SIAM) forecast, Banerjee said.

SIAM estimates that passenger vehicle (PV) sales will grow by less than 5% y-o-y this fiscal on the back of a high base effect and a flat first half of the year due to factors like elections and heavy rainfall in some states.

Last year, overall PV sales from January to November were 3.82 million. In the comparable period this year, they have grown to 3.98 million, up by 4.1% y-o-y.

Tata Motors grows, Hyundai slips

Meanwhile, Hyundai Motor India, the country's second-biggest car manufacturer by volume, sold 48,246 units in November, declining 2.4% from the same period last year.

SUVs and rural demand pushed Hyundai’s sales as well. SUVs contributed 68.8% to the company’s overall domestic sales. “We also bolstered HMIL’s presence in the hinterland of India, by achieving highest ever monthly rural contribution of 22.1% in November,” Tarun Garg, whole-time director and chief operating officer of Hyundai Motor India Limited (HMIL) said in a statement.

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Tata Motors registered marginal growth of 2% y-o-y in its total passenger vehicle sales with 47,117 units.

Toyota, JSW MG Motor India clock strong growth

Toyota Kirsloskar Motor India sales surged 44% y-o-y in November to 25,586 units, on the back of demand for SUVs. “Notably, two of our flagship models—the Innova Hycross and Urban Cruiser Hyryder—have each achieved the milestone of 100,000-units sales,” Sabari Manohar, vice president for sales, service and used cars, Toyota India, said in a press statement.

JSW MG Motor India also saw a 20% y-o-y growth last month. The company sold 6,019 units in November, with its newly launched MG Windsor EV driving sales. The model accounted for more than half the company’s sales, with 3,144 units being dispatched last month, the carmaker said in a statement.

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The company’s fleet of new energy vehicles—MG Windsor EV, MG Comet EV and MG ZS EV—comprised over 70% of its total sales during the month.