Domestic car sales dip in Oct, bikes post record volume: SIAM

While bike sales rose 18% in October, car sales were down 4%

There was little festive cheer for car makers in October with domestic sales declining by 3.88%, snapping a two-month streak of positive growth as the sector continue to reel under weak macro-economic conditions.

Motorcycle manufacturers, however, had reasons to celebrate in October, posting the highest sales volume in a single month since industry body SIAM started collating data in 1997-1998, riding on strong rural demand.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in October stood at 1,63,199 units as against 1,69,788 in the same month last year.

"We continue to see a decline in car sales. In today's economic scenario of high inflation and interest rates, the middle class (the major customers of cars) is the worst hit," SIAM Director-General Vishnu Mathur told reporters here.

He, however, said the positive spark during the festive season was the demand coming from the rural market following a good monsoon, which resulted in some traction of small cars.

"This is the only reason for the moderation in decline in car sales, otherwise the slide would have been much steeper," he added.

Car sales in India declined for a record nine months till July this year but grew in August and September.

In October, market leader Maruti Suzuki India posted a marginal decline in domestic sales at 79,040 units, while rival Hyundai Motor India saw its sales grow marginally to 35,973 units.

Homegrown auto major Tata Motors' domestic passenger car sales crashed by 33.44% to 10,944 units in October.

Mahindra & Mahindra saw its utility vehicle sales down by 13.18% to 22,034 units during the month.

SIAM said total utility vehicle sales in October grew by 7.01% to 57,020 units as against 53,285 units in the same month last year.

Mathur said new models like Ford EcoSport and Nissan Terrano are driving sales in the segment.

Expressing optimism that there could be some recovery, Mathur said: "If you look at the overall rate of decline in car sales this fiscal, it is gradually reducing. The rural demand is the bright spark but we don't know if this could be sustained."

At the current rate of improvement, he said, car sales during this fiscal could at least match last fiscal's number, otherwise if demand softens again, growth will be in negative territory.

SIAM said motorcycle sales in October grew by 18.05% to 11,05,103 units from 9,36,122 in the same month of the previous year.

"The October sales volume was the highest ever, bettering the previous best in October last year," Mathur said.

According to SIAM, market leader Hero MotoCorp saw its motorcycle sales grow by 20.76% to 5,54,545 units in October.

Rival Bajaj Auto, however, posted a decline of 12.51% to 2,28,998 units, while Honda Motorcycle and Scooter India (HMSI) saw its sales soar by 54.69% to 1,72,075 units during the month.

Total two-wheeler sales in October 2013 grew by 18% to 15,16,291 units from 12,85,015 in the same period of previous year.

"The demand for two-wheelers is good in rural markets this year as we have had a good monsoon," Mathur said.

Overall scooter sales in October stood at 3,46,171 units as against 2,79,427 in the same month last year, up 23.89%.

Market leader HMSI's scooter sales grew by 50.66% to 1,88,075 units, while Hero MotoCorp saw a growth of 6.31% at 59,579 units. TVS Motor Co, however, witnessed a dip in sales by 5.21% at 40,818 units.

According to SIAM, total sales of commercial vehicles (CV) were down by 19.77% to 53,533 units from 66,722 in the year-ago period.

"This is a reflection of the current economic conditions. The CV segment is a barometer of economic growth. Currently, there is nothing happening in the infrastructure and mining sectors," Mathur said.

Total sale of vehicles across categories registered a growth of 12.56% to 18,58,386 units in October as against 16,51,028 units in the same month of 2012, it added.