Automobile stocks vroomed in top gear, rising 2-4 percent intraday Monday as festive season demand boosted companies’ September sales and that is likely to continue in rest of the financial year 2016-17 as well.
Maruti Suzuki , the largest car maker in India, recorded highest ever monthly sales at 1.49 lakh units in September 2016, growing 31.1 percent over the same period last fiscal. It was driven by growth across segments.
Its domestic sales grew by 29.4 percent and exports jumped 54 percent. Mini (Alto, WagonR) cars segment, which had been sluggish in the past, reported 24.8 percent growth on yearly basis while utility vehicles segment registered a whopping 191 percent growth, largely boosted by Vitara Brezza (launched in March) and Ertiga. Ciaz sales too was strong, up 52.5 percent YoY.
Maruti shares hit a record high of Rs 5,707.25, rising over 4 percent intraday.
“This time the festival season (Ganpati, Dussehra, Diwali) will result into strong demand for automobiles. The sixth pay commission was in 2010. Six years is a good time to replace your old car or an old vehicle. So, my guess is that automobiles should continue to grow,” Nilesh Shah of Kotak Mahindra Asset Management Company said.
JP Morgan expects growth rates in 2HFY17 to be driven by new model launches and capacity addition.
Country’s largest commercial vehicle maker Tata Motors recorded sales growth of 8 percent YoY at 48,648 units in the month gone by, with its export business growing 29 percent, passenger car sales rising 27 percent and light commercial vehicle sales up 19 percent. However, its overall commercial vehicles sales were lower by 2 percent.
“Medium and heavy commercial vehicle sales continued to be stressed due to subdued demand, with the slowdown of recent months continuing, as a result of postponement of replacement and fleet expansion,” Tata Motors said in its filing.
M&HCV sales continued to be stressed due to subdued demand, with the slowdown of recent months continuing, as a result of postponement of replacement and fleet expansion.
Utility vehicle maker Mahindra and Mahindra ‘s auto segment sold 46,130 vehicles during September 2016, registering a 8 percent growth on yearly basis. Its domestic sales grew by 7 percent and experts 14 percent in same period.
A good and near normal spread of monsoon as well as new vehicle launches have helped the auto industry perform positively, Pravin Shah, president & chief executive automotive, M&M said.
Its tractor sales during the month surged 69 percent to 30,562 units compared to year-ago period with domestic business growth of 70 percent.
Country’s second largest commercial vehicle manufacturer Ashok Leyland said sales declined 18 percent year-on-year to 12,057 units in September. However, its sales on month-on-month basis increased 10.6 percent.
Eicher Motors sold 57,842 units of Royal Enfield in the month gone by, a 30 percent growth over a year-ago period while its commercial vehicle business has registered a 14 percent growth YoY.