September- a lucky month for auto makers

September has been a lucky month for the auto makers. In this month, the auto sales have continued to register strong growth with certain hiccups because of supply-side constraints. Such constraints were related to the component sourcing and production. Maruti Suzuki India (MSIL) observed the volumes of their domestic sales increase upto 33 per cent y-o-y (year-on-year) and around 3 per cent sequentially in the month of September. This was done even when the export volumes returned to normal. The auto analysts calculate that the inventory levels of Maruti Suzuki India Limited have been higher marginally and they are just ahead of the coming festive period. The company is also expected to increase the  production capacity by around 10,000 cars every month from October.

Another major auto player, Mahindra & Mahindra, observed sales volume jump by 25 per cent sequentially in the month of September. This also gives the indication of comparatively easier supply of components because the company has added a supplier for each of its key component. The recent launch of Maxximo, the small truck, has boosted and encouraged sales in the segment of LCV (light commercial vehicle) by around 22 per cent on a sequential basis and more than 50 per cent year on year.  The floods in northern part of India declined the sales of the tractor by around thirty per cent.  However, these  sales increased by three per cent on an  year on year basis. Mahindra and Mahindra so entered the segment of motorcycle and introduced 2 models in the 110cc and 350cc categories.  A price hike of  Rs 3,000-8,000 on the products had an aim to pass the higher input costs.

The domestic vehicle sales of Tata Motors dipped 2 per cent sequentially in the month of September. This had an impact of capacity constraints as well as of the component shortages. On the other hand, the sales of Nano dipped to thirty two per cent. The sales of LCV too dipped 8  per cent sequentially. It is also expected that the issues related to Ace will be at ease soon once when the production of Nano  shifts totally to the company’s Sanand facility.

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