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Maruti Suzuki posts growth for first time since February, reports 2.3% rise in October sales

Exports grew by 5.7 per cent during the month while overall sales of Maruti Suzuki India grew by 4.5 per cent at 153,435 units in October

Sumant Banerji        Last Updated: November 1, 2019  | 13:38 IST
Maruti Suzuki posts growth for first time since February, reports 2.3% rise in October sales
Maruti dispatched 139,121 units to its dealerships across the country last month against 135,948 units in October last year. In absolute terms, this was Maruti's highest sales in any month this fiscal.

India's largest carmaker Maruti Suzuki India Ltd reported a 2.3 per cent growth in domestic passenger vehicle sales in October ending a declining trend in monthly sales that started back in March.

Maruti dispatched 139,121 units to its dealerships across the country last month against 135,948 units in October last year. In absolute terms, this was Maruti's highest sales in any month this fiscal. The last time it had posted higher sales than this was in March 2019 when it had sent 145,031 units to its dealers.

The addition of a new model-S Presso, last month helped the company reduce the rate of decline in sales in its entry-level mini car segment that has been the worst hit by the overall slowdown in the industry. That category for the company saw a 13.1 per cent decline in the month that was much lower than the over 50 per cent decline in the first 6 months of the fiscal.

Also read: Auto slowdown: Maruti Suzuki cuts production for 8th consecutive month in September

In the compact segment that comprises some of the company's bestselling models like the Swift, Baleno, Dzire and new Wagon R, the company posted a growth of 15.9 per cent last month at 75.094 units. This represented a turnaround from the 17 per cent decline in the segment in the first half of this fiscal. Overall mini and compact segment growth during the month stood at 6.2 per cent.

The two other segments to register a decline for the company last month were the mid-size sedan segment where its model Ciaz suffered a 39 per cent decline in sales and the van category, which saw a near 27 per cent decline largely due to the discontinuation of its long-standing Omni van earlier this year. The decline in both categories in October was more or less in line with was witnessed in the first half of the fiscal.  

The company's utility vehicles and SUVs continued to garner good volumes in line with the overall industry trend where SUVs have outgrown other categories. Maruti's utility vehicle portfolio saw an 11.3 per cent growth in October as opposed to a near 9 per cent decline in the first half of the fiscal. Exports grew by 5.7 per cent during the month while the overall sales of the company grew by 4.5 per cent at 153,435 units in October.

Also Read: Maruti Suzuki Q2 profit skids 39% to Rs 1,358 crore, sales fall 25%

Last week the company had said it expected a flat to nominal growth during the festive season this year but had cautioned that a return to positive trajectory in October may not necessarily mean a sustainable turnaround for the industry. Unlike this year when bulk of the Navratri and Diwali fell in October, last year's Diwali was in November.

"Sales in October this year will be comparable to what we did last year," Maruti Suzuki chairman RC Bhargava had said last week. "Last year, the festive season was split between October and November so it is not a like-to-like comparison. But, it is a relief that we can, maybe, see a flat or some growth this month."

Also read: Maruti Suzuki reports 27% decline in domestic PV sales in September 2019

"This is on the back of record discounts and promotion offers. In the second quarter (July-September 2019), we offered an average discount of Rs 25,000 per vehicle against Rs 18,000 last year. That is a growth of 40 per cent, which is substantial. In October, the discounts are a shade higher than Rs 25,000," he added. "Both in retail and wholesale, October looks okay but that does not mean we are out of the woods yet. It is still too early to tell if it is a turnaround."

Typically, the 42 days festive period between Navratri and end of Diwali every year brings in about 25 per cent of industry volumes for cars and two-wheelers in India. Last year, the industry witnessed its worst festive period in 5 years as retail sale of passenger vehicles had declined by 14 per cent for passenger vehicles and 12 per cent for two-wheelers.

Also read:'Sales in September to be higher than in August,' says Maruti Suzuki Chairman RC Bhargava

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