Car sales: Auto dispatches may scale new peak in October

Carmakers in India are estimated to have dispatched record volumes to dealers in October anticipating strong demand. They are likely to have shipped 380,000-385,000 cars during the month, surpassing the previous high of 362,000 cars in September, as per industry estimates. This would imply a growth of 13.5-14.5% from the previous year – the highest monthly increase in more than a year.

Car sales are expected to hit a record high this festive season, with October likely being one of the last months of such strong growth, as the festive season comes to an end in two weeks with the major festival of Diwali. The likelihood of manufacturers curtailing dispatches from November to re-align supplies to demand may moderate sales volumes in the coming months.

October is the third month in a row when monthly wholesale volumes broke previous highs. With October volumes likely to have touched 380,000 cars, total car sales in the first ten months of the calendar year are likely to hit 3.45 million units, a growth of 9% YoY.

Shashank Srivastava, senior executive officer, at Maruti Suzuki India said, “October will be yet another month of record dispatches.” He, however, conceded that stock reduction in October hasn’t happened at the expected levels. “While October retails have been strong, it’s below expectations, that’s why the disquiet,” he added. He said if stocks don’t reduce as expected by mid-November, it will weigh on dispatches in the subsequent months.

The ten days of Navratri and Dusshera saw retail sales of passenger vehicle grow only 2% YoY. Retail sales advanced 19% in the five days post Dusshera, according to Vahan retail sales.

“The bookings have slowed down, so have the enquiries. But this time around, we will have a good period for three consecutive good months,” said Vinkesh Gulati, chairman, research & academy at FADA (Federation of Automobile Dealers Associations of India).

There are challenges in slow-moving models and their stocks are also at a high level. “We may see a December with promotional schemes as compared to last year on selling models, but more in slow-moving models,” he added.For now, the buoyancy in wholesale volumes is mirroring in retail sales, encouraging carmakers to add more stocks to take advantage of festive mood. According to Vahan, over 300,000 passenger cars have been registered for three months in a row beginning August, taking the total tally to 960,000 so far with two more days of sales yet to be reflected on the government registration portal.