Maruti Suzuki and Escorts have reported strong auto sales numbers for August 2020.
While Escorts report an all-time high for its monthly tractor sales, Maruti Suzuki reported a 21.3% year-on-year jump in passenger vehicle sales, possibly indicating a move by consumers away from public transport.
The company sold 1.13 lakh passenger vehicles, up from 93,174 in August of last year. Exports, at 7,920, were down 15.3%.
The biggest increase was in the mini segment, comprising the Alto and S-Presso. This segment had not been doing very well in recent times as consumers preferred mid-size hatchbacks like Swift to small cars like Alto.
However, in August 2020, there was a 95% jump in the sales of mini cars, resulting in 19,709 being sold during the month, against 10,123 in the same month of last year.
Sales of ‘compact cars’ — comprising Swift, Celerio, Baleno and so on, were also up, but not as much. They rose by 14% to 61,956 from 54,274 last year.
Sales of Ciaz were down 23% at 1,223.
Utility Vehicles, including Eritga and Brezza, also rose 13.5% to 21,030.
Exports fell 15% to 7,920, while sales to Toyota too fell by 41% to 1,379.
The numbers indicate that some of the pent up demand in the market is getting released, though more of it is likely to come to the fore during the festival season that starts at the end of September.
ESCORTS SALES HITS ALL-TIME
Escorts Ltd, one of India’s oldest and most prominent agricultural machinery makers, reported its highest ever monthly tractor sales in India at 6,750 units in August.
This was 79% higher than tractor sales for August last year.
Exports were also higher by 90% at 518.
Altogether, tractor sales were up 80% for the company.
The numbers are very different from what it has been reporting for the last few months.
For July, the company had reported tractor sales of 4,953 for the Indian market, up 10% compared to the year before. Exports were up 4% at 369.
It is likely that the company is seeing ‘pent up demand’ returning to the market. Pent up demand refers to the postponement of purchases by farmers due to any uncertainty or logistical problems, in this case, referring to the COVID-19 pandemic and the lock-downs imposed in its wake.
The company said its factories are working at full capacity right now.
“The market sentiment continues to be highly positive with good monsoons, better Kharif sowing, crop prices holding up well, and good supply of retail finance. We remain optimistic for the coming festive months.
“The supply side situation improved significantly as compared to last month. We are currently operating close to peak capacity now. In August 2020 we could build some inventory both at dealer and depots, which since last few months was at very low levels,” it said.
The numbers augur well for the day, as they are the first indicator of the monthly sales reports for automobile and farm equipment companies for August.
Automakers like Maruti Suzuki and Mahindra & Mahindra are expected to report their August auto sales numbers in the coming hours.