Domestic auto major Mahindra & Mahindra.
Credit: Reuters Photo
Bengaluru: Carmakers Mahindra & Mahindra and the Indian units of Toyota Motor Corp and Kia Motor reported higher car sales in June, boosted by demand for sports utility vehicles (SUV) even as heat waves weighed on purchase decisions.
Each month, automobile makers in India release wholesale numbers, or vehicle sales, to dealers. The sales numbers are seen as a key indicator of private consumption in India. The auto sector contributes around 7 per cent to the country's economy.
According to monthly data from automakers released on Monday, Mahindra's total car sales grew 11.2 per cent year-on-year, missing brokerage Nomura's 16 per cent estimate and Jefferies' 18 per cent estimate. This is Mahindra's slowest monthly sales growth since March.
Intense heat in northern India has reduced footfall at dealerships, according to Nomura, which added that a normal monsoon could likely lead to a revival in rural sales for passenger vehicles. Toyota's and Kia's respective growths of 40.1 per cent and 9.8 per cent are their largest since February. Nomura and Jefferies do not provide monthly sales estimates for Toyota and Kia.
A surge in domestic sales of more-expensive SUVs last year has extended into 2024 and benefitted companies including Mahindra and Toyota, whose portfolios consist almost entirely of utility vehicles. Maruti Suzuki, which dominates the cheaper small-car segment, reported a 12.4 per cent climb in June total sales, handily beating a 2 per cent growth estimate by analysts at Nomura and Jefferies. Its shares rose 2 per cent.
Meanwhile, domestic demand recovery in rural areas outweighed weak exports, helping motorcycle-maker Bajaj Auto record a 5.1 per cent growth in two-wheeler sales. While this beat Nomura's estimate of a 1 per cent decline, it missed Jefferies' estimate of 10 per cent growth. Rural two-wheeler sales have recovered from weakness through fiscal 2024, which had hurt entry-level sales for motorbikes such as the Bajaj Platina.
The rural sector accounts for more than half of India's total two-wheeler sales, according to a 2023 report by motorcycle maker Hero Motorcorp. Company Total June Y/Y change sales in June (units) (per cent) Mahindra & 69,397 11.2 Mahindra Toyota 27,474 40.1 Kirloskar Motor Kia Motor 21,300 9.8 Maruti 12.4 Suzuki 179,228 Bajaj Auto 358,477 5.1 Mahindra & 47,319 6.4 Mahindra Farm Equipment.