India’s passenger vehicle wholesales witnessed a significant 12.4% year-on-year increase in October, reaching 528,384 units, propelled by robust festival demand, favourable tax policies, and attractive interest rates that enhanced vehicle affordability.
Photograph: Hamad I Mohammed/Reuters
Key Points
- Passenger vehicle wholesales in India surged 12.4% year-on-year in October to 528,384 units, primarily due to strong festival demand and improved affordability.
- Factors like GST rate cuts, income-tax relief, and low interest rates contributed to increased vehicle affordability, encouraging two-wheeler owners to upgrade to cars.
- Maruti Suzuki India reported a 20.5% growth in domestic wholesales, reaching 212,384 units, but expressed concern over low dealership inventories, with only 12 days of stock.
- Other major manufacturers like Tata Motors, Mahindra & Mahindra, and Hyundai Motor India also reported significant increases in October wholesales.
- Toyota Kirloskar Motor was the only manufacturer among those listed to experience a decline, with domestic wholesales falling 26.7%.
Despatches of passenger vehicles (PVs) in India from manufacturers to dealers in October increased 12.4 per cent year-on-year (Y-o-Y) to 528,384 units, supported by strong festival demand, cuts in rates of goods and services tax (GST) last year, income-tax relief, and comparatively low interest rates.
These factors improved vehicle affordability and encouraged customers to upgrade from two-wheelers to cars, said Maruti Suzuki India senior executive officer (marketing & sales) Partho Banerjee during a video press conference on Sunday.
>Maruti Suzuki India Ltd (MSIL), the country”s largest PV manufacturer, reported domestic wholesales of 212,384 units in October, a growth rate of 20.5 per cent over 176,318 units in the same month last year.
The company also reported strong demand across small cars, sport utility vehicles (SUVs), sedans and multi-purpose vehicles (MPVs).
Inventory Concerns and Production Boost
However, with the demand continuing to remain high, Banerjee said the low inventories at dealerships were a concern.
Maruti”s dealer network had just 12 days of stock at the end of October, with retail sales exceeding wholesale despatches.
In response to a question on whether further increases in the repo rate could affect vehicle demand, Banerjee replied: “Whenever there is an increase in the interest rate, we try to come with more of the innovative…finance products.”
On the possibility of further price increases amid rising raw material costs, Banerjee said the company had raised vehicle prices three times, but in a calibrated manner. It was also trying to reduce costs in production, marketing, advertising and sales promotions.
“We are closely watching it. At the same time, if you see sequentially compare our operating profit from Quarter 1 to Quarter 2 of FY27, we have improved. We have increased the percentage of earnings before interest, tax, depreciation and amortisation,” he said.
He added that the company hoped commodity prices would cool in the third quarter. However, if costs continued to rise, further price increases could not be ruled out.
Rahul Bharti, senior executive officer (corporate affairs), MSIL, said the company was steadily increasing production to meet demand.
The company”s production in October reached nearly 260,000 units, an increase of 35 per cent over the same month last year.
Its average daily production rose from 9,100 units in the first quarter of FY27 to 9,600 units in the second quarter and 10,100 units in October Bharti attributed the increase to additional production capacity, better efficiency and a higher number of working days.
He said demand was still outstripping supply, with bookings remaining high and dealer inventories low.
Performance of Other Manufacturers
Among other manufacturers, Tata Motors reported wholesales of 73,894 units in October, up from 61,134 units a year earlier.
Mahindra & Mahindra (M&M) recorded wholesales of 73,338 units as against 71,624 units in October last year.
Hyundai Motor India reported domestic wholesales of 62,799 units, against 53,792 units in the year-ago month.
The company attributed its performance to strong festival demand and healthy momentum in domestic and export markets.
Tarun Garg, managing director and chief executive officer, Hyundai Motor India, said: “The newly launched Hyundai Bayon … will provide a further impetus to our growth in India as well as across 50 plus export markets, reinforcing India”s role as a strategic manufacturing and export hub for Hyundai.”
Kia India reported domestic wholesales of 33,462 units in October compared with 29,556 units in the corresponding month last year.
Atul Sood, senior vice-president (sales & marketing), Kia India, said: “The contribution of our compressed natural gas models to sales, alongside our highest ever monthly electric-vehicle sales, further demonstrates that our multi-powertrain strategy is translating into tangible results.
“This reinforces our commitment to offering differentiated products and powertrain choices that respond to the diverse mobility needs of Indian customers.”
Toyota Kirloskar Motor was the only manufacturer among the six listed to report a decline.
Its domestic wholesales fell 26.7 per cent to 29,521 units in October from 40,257 units in the same month last year.
