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Carmakers in India Report Highest Ever Sales in October 2020; Is the Worst Over for Auto Companies?

New cars are seen lined up next to the dock as the global outbreak of the coronavirus disease (COVID-19) continues, at the Port of Los Angeles, California. (Image: Reuters)

New cars are seen lined up next to the dock as the global outbreak of the coronavirus disease (COVID-19) continues, at the Port of Los Angeles, California. (Image: Reuters)

Healthy off-take on the back of festive season, along with pent-up demand and attractive interest rates are few of the reasons for accelerated year-on-year (YoY) and sequential sales numbers for October.

Most of the carmakers in India have reported their highest ever sales in the month of October 2020, while other have shown positive growth. Healthy off-take on the back of festive season, along with pent-up demand and attractive interest rates are few of reasons for accelerated year-on-year (YoY) and sequential sales numbers for October.

Innumerous studies and analysts have also cited factors such as the preference for personal mobility over public transport due to the pandemic as another key reason for the upswing. The Indian auto industry which was suffering from a major sales slump in 2019 and then due to COVID-19 is again looking at it golden days.

Amongst the major players, Maruti Suzuki's total sales rose 18.9 per cent to 1,82,448 units from 1,53,435 units sold in October 2019. The domestic sales including sales to other original equipment manufacturers (OEM) stood at 1,72,862 units, 19.8 per cent higher on a year-on-year basis. Exports, too improved in October, as the company sold 9,586 units overseas, higher by 4.7 per cent on a year-on-year basis.

Another auto major, and India's second largest carmaker Hyundai Motor India recorded its highest-ever monthly domestic sales in October at 56,605 units. It reported a 13.2 per cent growth in its domestic sales compared to 50,010 units sold during October 2019.

Tata Motors', the homegrown automaker saw a major shift in fortune thanks to its youthful and value-for-money product offensive making it the third largest carmaker in the country. Tata saw its domestic sales rose 27 per cent to 49,669 units from 39,152 sold during the corresponding period of 2019. The total passenger vehicles segment of the company rose 79 per cent to 23,617 units from 13,169 units sold in October 2019.

"Tata Motors Ltd sales in the domestic and international market for October 2020 stood at 52,132 vehicles, compared to 41,354 units during October 2019," the company said in a statement.

On the other hand, companies like Kia and MG, both of which entered India only recently and at a time when the industry was reeling under the pressure of sales slump, have successfully carved a niche for themselves. Kia Motors, for instance, has surprised everyone with its products and registered its highest-ever domestic sales since its entry into the Indian market with 21,021 units sold in October 2020. The company recorded a 64 per cent YoY growth.

"The latest game changer in the market, Kia Sonet, remains to be one of the preferred choices amongst Indian customers which found 11,721 happy homes last month," the company said.

In contrast, auto majors such as Mahindra and Mahindra reported a fall of 14.5 per cent in its overall sales during October at 44,359 vehicles. The company had sold 51,896 units in October last year. The passenger vehicle segment of the company which includes utility vehicles, cars and vans recorded a 1 per cent growth in sales at 18,622 vehicles last month.

Its utility vehicle segment, however, witnessed a 3 per cent growth at 18,317 units in October 2020, compared to 17,785 vehicles in October 2019. M&M's Chief Executive Officer, Automotive Division Veejay Nakra noted that for the company festive season has started on a positive note with deliveries and bookings being higher than last year.

Auto major Toyota Kirloskar Motor reported a 1.87 per cent YoY fall in its overall sales in October at 12,373 units. During the same period last year, the company had sold 12,610 units. On a month-on-month basis, its sales clocked a growth of 52 per cent. In September 2020, the company had sold 8,116 units.

Shamsher Dewan, Vice President, ICRA said: "October marked the beginning of auspicious festive season in India and the pace of inventory restocking by OEMs reached its peak. Even as dealers remain cautiously optimistic about retail sales going into the festive season, the listed OEMs reported a 24 per cent YoY increase in their domestic sales volumes in October 2020."

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