India’s auto industry seems to be missing the usual festive-season sheen this October, with car sales barely breaking into positive territory after three consecutive months of negative growth. Bike and scooter makers registered double-digit increases, but by pushing vehicles to retailers ahead of Dhanteras and Diwali. Sales have picked up a bit post Dussehra and we expect some improvement in the second half of the festive season as fuel prices are cooling off. Truck and bus makers, on the other hand, continued to buck the tepid sentiment with yet another month of strong double-digit growth as increasing infrastructure activity drove demand for more cargo carriers. M&HCV demand momentum in the month remained strong, helped in particular by strong growth in the tipper segment, backed by higher infra/construction spending, however, there could be some slowdown if NBFC liquidity remains tight.
Consumer sentiment during the festive season has been low in PV segment and has even resulted in a drop in retail sales, owing to factors such as higher inflation, interest rates, insurance premiums and fuel prices, in addition to irregular monsoons and devastating floods in Kerala. The cost of vehicle ownership is estimated to have risen by about 9% this fiscal as compared with an average of 2-4% for the past five years.
MSIL dispatched 1.35 lakh vehicles in October 2018. Low production of Ertiga, with the company transitioning from the older generation of the van to a revamped variant, also had an impact on dispatches at the maker of Alto and Wagon R. Hyundai managed to post record dispatches led by the new Santro, but that meant a growth of just 5%. While M&M and Honda posted flat numbers, new models helped TAMO and Ford India registered double-digit growth.
At TAMO, M&HCV segment grew by 16%, the ILCV truck segment grew 29%, growth in SCV Cargo & Pickup stood at 30%, while CV Passenger degrew by 2%. However, Ashley posted 17% rise in its total sales. In 2W space, HMCL/TVSL/BAL reported a growth of 16%/26%/32%.
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