August PV wholesale dispatches jump 36% as demand momentum strengthens ahead of festive season

Overview

Passenger vehicle wholesale dispatches rose 36 percent year-on-year in August to 448,319 units, according to industry data reported by Moneycontrol. The surge comes as new model launches, discount offers, and low auto loan rates helped draw buyers to showrooms ahead of the festive season. The strong performance follows a favourable base, as last year buyer sentiment remained weak for most of the first half, from April to September, with potential buyers delaying purchases in anticipation of GST rate rationalisation.

Automaker performance

Maruti Suzuki India, the country's largest carmaker, reported a 35 percent year-on-year increase in domestic August volumes to 176,971 units, as reported by Moneycontrol. Forbes India reported that Maruti's domestic sales rose 34.8 percent to 1.76 lakh units from 1.31 lakh units a year earlier, with total sales—including domestic sales of light commercial vehicles, sales to other original equipment manufacturers, and exports—climbing to 2.19 lakh units from 1.8 lakh units, an increase of about 21.7 percent. That figure was down from an all-time high of 2.41 lakh units in July, a dip the company attributed to fewer production days rather than any softening in demand.

Tata Motors Passenger Vehicles recorded domestic wholesale volumes of 65,253 units, up 59 percent from a year earlier, according to Moneycontrol. Forbes India reported that Tata Motors Passenger Vehicles reported combined domestic and international sales of 67,753 units, up 56 percent. Mahindra & Mahindra's domestic utility vehicle sales rose 50 percent to 59,257 units, as reported by both Moneycontrol and Forbes India. Hyundai Motor India posted a 24 percent year-on-year increase in domestic sales to 54,396 units, according to Moneycontrol, while Forbes India reported Hyundai's total sales rose 8.8 percent to 65,796 units. JSW MG Motor India reported a 14 percent rise in volumes to 7,508 units, as reported by both outlets.

Other manufacturers also posted gains. Forbes India reported that Honda Cars India's total sales rose about 10.8 percent to 7,508 units, Renault India's domestic wholesales stood at 2,842 units, and TVS Motor Company's total sales rose 21 percent. Forbes India also noted growth for Honda Motorcycle & Scooter India, Hero MotoCorp, and Bajaj Auto, though specific figures were not detailed in the available reporting.

Industry commentary

Partho Banerjee, Senior Executive Officer, Marketing & Sales, Maruti Suzuki India, said wholesale and retail volumes are matching and network stock is 16 days. "Our wholesale and retail volumes are matching and we have a network stock of 16 days. The momentum is very strong. We have a pending booking of 1.8 lakh," Banerjee said, as quoted by Moneycontrol. He added that the company's average daily production throughput was close to 2 lakh units, or about 8,000 vehicles a day, and that pending bookings of close to 1.8 lakh units signal underlying demand strength.

Banerjee noted that the pace of growth seen in August may not sustain through the festive season because of the base effect. "In the festival time, the growth cannot be 35 percent because there will be the base effect. This year will be the year of two halves like last year. I do not see a reason why the industry should not..." he said, as reported by Moneycontrol. Forbes India quoted Banerjee as saying he expects industry volumes to expand by at least 10 percent for the current fiscal year.

Atul Sood, Senior Vice President, Sales & Marketing, Kia India, said the encouraging contribution from the newly launched Syros EV signals growing customer acceptance of electric mobility, according to Moneycontrol. Velusamy R, President, Automotive Business, M&M, said demand continues to remain strong across the company's portfolio, as reported by Moneycontrol and Forbes India.

Context and outlook

The strong August figures follow a year in which a GST rate cut—announced on August 15 and effective from September 22—reignited consumer demand. GST on most cars was reduced from about 28 percent to a flat 18 percent. Sales surged in the months that followed, prompting the industry to call last year a "year of two halves": pre- and post-GST cut.

This year, driven by GST rationalization, demand conditions are considerably stronger. Automakers reported robust growth across segments, aided by product launches, attractive financing, and improving consumer sentiment. Automakers had deliberately curtailed factory dispatches to dealers to prevent inventory build-up and keep stocks lean ahead of the festive season. Heavy rains across parts of the country also impacted dealership footfalls in August last year.

Maruti's exports declined 7.4 percent to 33,844 units from 36,538 units as global shipping constraints weighed on the overseas business. "There are some concerns on ship," Banerjee said, as reported by Forbes India. Asked whether the company planned festive discounts, Banerjee said pricing decisions would depend on local conditions: "Discounts are market-driven and vary from market to market."