The domestic passenger vehicle industry returned to the growth path in October after three consecutive months of decline in sales but still endured a frustrating festive season this year registering a muted 1.55 percent increase in sales last month.
Passenger car sales during October 2018 stood at 185,400 units, up 0.38 percent over the same month last year, while sale of utility vehicles including SUVs and vans saw a 3.9 and 3.55 percent growth at 82,414 and 16,410 units respectively.
While the twin festivals of Navratri and Diwali is spread over two months of October and November this year, the numbers collated by Society of Indian Automobile Manufacturers (SIAM) are wholesale figures that reflect the stocking at various dealerships in the country. The low figures for October indicates dealerships were already carrying sufficient inventory even before the onset of the festive season and manufacturers did not have the elbow room to dispatch more cars. This despite a course correction between July and September when industry despatches saw continual decline.
"Going by the numbers the month of October didnt look like a festive month. But lets wait for the November data to understand the full impact of the festive season," said Vishnu Mathur, director general, SIAM. "There are a few positives though. For now we can say that the base effect of last year is over and it is reflected in the October sales which have gone into a positive territory."
Festive season is generally considered good months for buying cars or two wheelers and traditionally sales peak in these two months. A bumper festive season invariably means a high double digit growth for the industry. However, dampeners like high fuel prices, interest rates and a general pessimistic mood in the economy has soured the sentiment this year.
"Despite the festival season, the consumer sentiment has remained subdued last month in comparison to other years," says Rajesh Goel, Senior Vice President and Director, Sales and Marketing, Honda Cars India Ltd.
While cars struggled, there was some buoyancy visible in the two wheeler segment that grew 17.23 percent during the month at 2,053,497 units. The growth was largely on the back of an over 20 percent growth in mobike sales at 1,327, 758 units. Sale of commercial vehicles that is relatively less impacted by impulsive purchases that are are made during festive season but are a better reflection of the overall economy also continued to grow by a robust near 25 percent at 87,147 units during the month.