Passenger vehicle wholesales in India rose to a record high in October as companies pushed dispatches to dealers to cater to the enhanced demand in the festive season.

The overall passenger vehicle wholesales in October rose to 3,91,472 units, up 16 per cent from 3,36,679 units in the same month last year.

Last month witnessed the highest-ever dispatches of passenger vehicles in the domestic market by Maruti Suzuki India and Mahindra & Mahindra.

“It is not only the highest October in terms of sales, but also the highest ever month which we have seen in the Indian passenger vehicle industry in any year in any month,” Maruti Suzuki India Senior Executive Officer (Marketing and Sales) Shashank Srivastava told reporters in a call.

He noted that the fading away of semiconductor shortage issues has helped the industry ramp up production and cater to enhanced demand in the market.

Besides, brisk business during the peak festival period of Navratra also helped in the volume growth last month, Srivastava said.

He noted that the share of sports utility vehicles in the overall passenger vehicle sales continues to grow and currently stands at 50.7 per cent.

“This makes this year quite good so far, because every month has been the highest ever that month. In fact, if you include January, February and March also or even the entire calendar year also, every month has been the highest ever. That is a very positive sign for the industry,” Srivastava said.

He however noted that the inventory level remains quite high at the dealer level and it would depend upon the retail sales in the first 15 days of this month as how the wholesales would shape up going ahead.

The stock has gone up because the wholesale has been less than the retail, he added.

In October, MSI reported its best-ever domestic monthly dispatches in October at 1,77,266 units, up 21 per cent from 1,47,072 units in the year-ago period.

Its total domestic passenger vehicle sales rose to 1,68,047 units last month from 1,40,337 units in October 2022.

“This is the highest ever number for Maruti Suzuki in any year in any month. The previous highest being in October 2020, which was 1,63,656 units,” Srivastava said.

Sales of mini segment cars, comprising Alto and S-Presso, declined to 14,568 units against 24,936 units in October 2022.

Its compact cars, including Baleno, Celerio, Dzire, Ignis, Swift, Tour S and WagonR, sales rose to 80,662 units compared to 73,685 units in the year-ago month.

Utility vehicles, consisting of Brezza, Grand Vitara, Ertiga and XL6, sales surged 91 per cent to 59,147 units last month from 30,971 units earlier.

Rival Hyundai Motor Company said its domestic sales increased by 15 per cent to 55,128 units last month, from 48,001 units in the same month a year ago.

“The festival season has again proved that customers are really wanting to buy cars. The good part is that although we do not have pent up demand, the fresh inflow is what is keeping us afloat,” Hyundai Motor India COO Tarun Garg said.

Mahindra & Mahindra said its utility vehicle dispatches rose by 36 per cent year-on-year to 43,708 units in October compared to 32,226 units in the year-ago period.

“While the strong festive demand should see us continue our growth momentum in November, we will keep a close watch on select supply-related challenges,” M&M Automotive Division President Veejay Nakra said.

Tata Motors said its passenger vehicle wholesales, including electric vehicles, in the domestic market were at 48,337 units compared to 45,217 units in the year-ago month, up 7 per cent.

Toyota Kirloskar Motor (TKM) said its dispatches increased by 66 per cent year-on-year to 21,879 units in October.

“For us, sustained growth has been coming from across every segment where Toyota has its presence,” TKM Vice President of Sales and Strategic Marketing Atul Sood said.

Kia India said its sales increased by 4.4 per cent year on year to 24,351 units in October.

“During the festive season, our customers’ positive outlook has helped us achieve our fourth-highest monthly sales ever in India,” Kia India National Head, Sales & Marketing Hardeep Singh Brar said.

The company is working towards maintaining the same momentum in the coming months, he added.

In the two-wheeler segment, Hero MotoCorp reported a 26.5 per cent increase in total sales at 5,74,930 units in October 2023, as compared to 4,54,582 units in the same month last year.

Rival Honda Motorcycle and Scooter India (HMSI) said its total sales stood at 4,92,884 units last, a 10 per cent year on growth over October 2022.

Consumption of diesel, the most consumed fuel in the country — accounting for about two-fifths of the demand, fell to 5.81 million tonnes in September from 5.99 million tonnes demand in the same period a year ago.
| Photo Credit: ANI

Diesel sales in India fell 3% in September as a receding monsoon continued to dampen demand and slowed industrial activity in some parts of the country, preliminary data of state-owned firms showed.

While diesel sales by three state-owned fuel retailers fell year-on-year, petrol sales rose in September.

Consumption of diesel, the most consumed fuel in the country — accounting for about two-fifths of the demand, fell to 5.81 million tonnes in September from 5.99 million tonnes demand in the same period a year ago.

Demand dipped by over 5% in the first half of September, and consumption picked up in the second half as rains receded.

Month-on-month sales were up 2.5% when compared to 5.67 million tonnes of diesel consumed in August.

Diesel sales typically fall in monsoon months as rains lower demand in the agriculture sector, which uses the fuel for irrigation, harvesting and transportation. Also, rains slow vehicular movements.

Consumption of diesel had soared 6.7% and 9.3% in April and May, respectively, as agriculture demand picked up and cars yanked up air-conditioning to beat the summer heat. It started to taper in the second half of June after the monsoon set in.

Petrol sales were up 5.4% to 2.8 million tonnes in September when compared to the same period last year.

Consumption growth was almost flat in August.

Sales in September were up 5.6% month-on-month, the data showed.

Macroeconomic data suggests a broad-based expansion across all sub-sectors of the economy, with the services sector continuing to post robust growth across financial, real estate and government services. India’s economy has demonstrated robust resilience and is likely to have surpassed the performance of most major economies during the first half of 2023.

Industry sources said with steady and healthy economic activity and the ongoing air travel recovery, India’s oil demand is projected to rise in the remainder of the year.

Suppliers group OPEC sees India’s oil demand expanding on average by 2,20,000 barrels per day on the back of vigorous economic growth.

Consumption of petrol during September was 19.3% more than in the COVID-marred September 2021 and 30%more than in pre-pandemic September 2019.

Diesel consumption was up 19% over September 2021 and 11.5% compared to September 2019.

With the continuing rise in passenger traffic at airports, jet fuel (ATF) demand rose 7.5% to 5,96,500 tonnes during September against the same period last year.

It was 55.2% more than in September 2021, but 3.55% lower than pre-COVID September 2019.

Month-on-month jet fuel sales were almost flat compared to 5,99,100 tonnes in August 2023.

Cooking gas LPG sales were up 6% year-on-year at 2.67 million tonnes in September. LPG consumption was 11.4% higher than in September 2021 and 23.3% more than in pre-COVID September 2019.

Month-on-month, LPG demand soared 7.3% against 2.49 million tonnes of LPG consumption during August, the data showed.

At the interbank foreign exchange, the domestic unit opened at 82.58, then touched the lowest level of 82.62. File
| Photo Credit: Special Arrangement

The rupee appreciated by 2 paise to 82.61 against the US dollar in early trade on Tuesday amid a weak American currency against major rivals overseas and positive domestic equity markets.

Retreating crude oil prices also supported the Indian currency even as outflow of foreign funds capped a sharp gain, forex traders said.

At the interbank foreign exchange, the domestic unit opened at 82.58, then touched the lowest level of 82.62. It later traded at 82.61 against the greenback, registering a gain of 2 paise over its previous close.

On Monday, the rupee settled 1 paisa higher at 82.63 against the US dollar.

The Indian currency was trading in the narrow range as market participants are awaiting the US jobs data to be released on Friday. Also, a close watch on the Chinese currency’s response to the country’s slowing factory output and other macroeconomic indicators weighed on the rupee, forex analyst said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.20 per cent lower at 103.85.

Brent crude futures, the global oil benchmark, fell 0.05% to USD 84.38 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 182.08 points or 0.28 per cent higher at 65,178.68. The broader NSE Nifty advanced 53.65 points or 0.28 per cent to 19,359.70.

Foreign Institutional Investors (FIIs) were net sellers in capital markets on Monday as they offloaded shares worth ₹1,393.25 crore, according to exchange data.

Indian Rupee notes are seen in this picture illustration taken in Mumbai June 12, 2013. File. (For Representational purpose only)
| Photo Credit: Reuters

The rupee depreciated by 8 paise to 82.74 against the US dollar in early trade on Friday, tracking a firm dollar against major rivals overseas.

Analysts said, weak sentiment in the domestic equity market and elevated level of crude prices nearing USD 87 per barrel also weighed on the domestic unit.

On Thursday, the Reserve Bank of India in its bi-monthly monetary policy review decided to keep key interest rate unchanged, but hinted at tighter policy if food prices drive inflation higher.

The American currency regained after US consumer price inflation showed moderation in July, raising hopes that the US Federal Reserve would pause rate hike.

At the interbank foreign exchange market, the local unit opened at 82.75 against the US dollar and moved in a narrow range of 82.73 to 82.76. It later traded at 82.74 against the greenback, registering a fall of 8 paise from its previous close.

On Thursday, the rupee rebounded 19 paise to close at 82.66 against the US dollar after the RBI asked banks to set aside a larger part of incremental deposits under the cash reserve ratio (CRR) as part of measures to take out excess liquidity from the banking system.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.05% to 102.57.

Global oil benchmark Brent crude was trading 0.02% lower at USD 86.38 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 229.33 points or 0.35 per cent lower at 65,458.85. The broader NSE Nifty declined 76.05 points or 0.39% to 19,467.05.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they purchased shares worth Rs 331.22 crore, according to exchange data.

“With this investment, Mahindra’s EV subsidiary’s valuation goes up by 15% from up to ₹70,070 crores to up to ₹80,580 crores. The breadth of global experience of these marquee investors will be valuable for MEAL,” M&M said in a statement. 
| Photo Credit: Special arrangement

Mahindra & Mahindra Ltd. and global investment firm Temasek have executed a binding agreement where by Temasek would invest ₹1200 crore into Mahindra Electric Automobile Limited (MEAL), the four-wheeler (4W) passenger electric vehicles company.

The investment would be in the form of Compulsorily Convertible Preference Shares (CCPS) at a valuation of up to ₹80,580 crore, resulting in Temasek owning about 1.49% to 2.97% stake in MEAL.

Temasek will join British International Investments (BII) as an investor in MEAL.

“With this investment, Mahindra’s EV subsidiary’s valuation goes up by 15% from up to ₹70,070 crores to up to ₹80,580 crores. The breadth of global experience of these marquee investors will be valuable for MEAL,” M&M said in a statement.

“The amount invested is consistent with the Mahindra Group’s plan to minimize dilution,” the statement added.

Anish Shah, MD & CEO, M&M said, “Temasek’s investment is a step forward, as we execute our strategy towards future leadership in electric SUVs. The valuation of up to $9.8 billion is testimony to Mahindra’s EV business and the progress we have made in the journey towards scaling up the electric SUV portfolio.”

Rajesh Jejurikar, Executive Director and CEO, Auto & Farm Sectors, M&M said, “We demonstrated Mahindra’s ambition to build a desirable global brand with the reveal of our born EV portfolio based on the INGLO platform in August 2022 in UK, which is on track for execution.”

“By having Temasek as an investor, we have strengthened our global strategic partnerships and are targeting 20% to 30% of Mahindra SUVs sales from electric vehicles by 2027,” he added.

With the Indian Meteorological Department signalling that parts of Uttar Pradesh, Bihar, Assam, Punjab, Karnataka and Tamil Nadu may see less than normal rainfall this month, sowing of paddy and pulses could be further affected. These effects were already exacerbating food inflation, reckoned analysts at brokerage Motilal Oswal. File
| Photo Credit: Reuters

Despite a wetter July so far lifting the overall rainfall above the long period average (LPA), India’s southern peninsula, the Deccan Plateau and the eastern region continue to face a below-normal monsoon and Kharif sowing remains lower than last year for crops like rice and pulses, spurring increases in their prices. 

By July 15, the overall sown area of Kharif crops was 2% lower compared with the same time in 2022, with maize (-5.6%), rice (-6.1%), pulses (-13.3%) and cotton (-11.6%) being some of the major crops facing shortfalls in sowing this year. The widest decline was recorded in Arhar, with the area sown more than 38% lower than last year, Bank of Baroda’s economics research department observed in a note. 

Worryingly, reservoir levels in western and southern regions of the country were also at lower marks than last year, even as there had been uneven distribution of rainfall this season, with parts of West and North India seeing excessive rainfall, while it was deficient in Bihar, Jharkhand and the North Eastern States.   

With the Indian Meteorological Department signalling that parts of Uttar Pradesh, Bihar, Assam, Punjab, Karnataka and Tamil Nadu may see less than normal rainfall this month, sowing of paddy and pulses could be further affected. These effects were already exacerbating food inflation, reckoned analysts at brokerage Motilal Oswal. 

“Deficient rainfall, and consequently lower rice and pulses sowing, has pushed prices higher. Rice constitutes around 4.4% and pulses have a weight of 6% in the overall Consumer Price Index,” the analysts noted in a report. “July is a crucial period for sowing Kharif crops as about 32% of monsoon precipitation typically occurs during this month,” they added.  

Mining major NMDC has increased iron prices (per tonne) by ₹1,050 for lump ore and by ₹650 for the same quantity of fines.

The price per tonne has been fixed at ₹4,950 for lump ore and ₹4,210 for fines with effect from July 18, the company said on Tuesday. The prices are inclusive of royalty, DMF, NMET and exclusive of cess, forest permit fee and other taxes.
NMDC had previously revised the price to ₹3,900 and ₹3,560 respectively on May 29. The prices then were excluding royalty, DMF, NMET, cess, forest permit fee and other taxes.
 
The latest revision is the first increase in current fiscal by India’s largest iron ore producer. The price set on March 21 was ₹4,500 and ₹4,110 respectively, which the company on April 29 revised to ₹4,200 and ₹4,010 respectively.

Adani Group Chairman Gautam Adani addresses during the Annual General Meeting (AGM) of his group companies, on Tuesday, July 18, 2023.
| Photo Credit: PTI

Gautam Adani on Tuesday said that the U.S.-based short seller Hindenburg Research’s report on the group was a deliberate, malicious attempt at damaging the group’s reputation and generate profit by driving down its stocks in the short term.

He described the report as a mix of targeted misinformation and discredited allegations written by vested interests. He said this while addressing the Annual General Meeting of the group firms in Ahmedabad.

“The report was a combination of targeted misinformation and discredited allegations, the majority of them dating from 2004 to 2015,” he said in his speech.

After the damning report by the short seller that raised questions about the group’s finances and accused it of accounting fraud, the group has reportedly questioned the timing and motive of the report.

Earlier in a 400 page rebuttal, the group had dubbed the report as an “attack on India.”

In his speech, Mr. Adani said the group raised finances from the international markets and no credit agency internationally cut any ratings of the group.

Photo used for illustration purpose only.
| Photo Credit: K.R. Deepak

With merchandise exports shrinking 15.1% in the first quarter of this year, after racking up a record $450 billion in 2022-23, the government is playing it safe on announcing a clear target for outbound shipments this year and is likely to opt for a range of scenario-based targets instead.

While the Commerce Ministry has undertaken an internal exercise to set a target for exports in 2023-24 — and has even communicated a number to export promotion councils of different industrial sectors as well as overseas diplomatic missions — there is now a rethink underway, a senior Ministry official indicated.

Shrinking exports

Goods exports had decelerated 12.6% in April and 10.2% in May, but recorded their steepest fall in 37 months this June with a 22% drop. The $32.7 billion export tally for last month was also the lowest in absolute terms since October 2022.

While the final June numbers for exported services are still awaited, forex earnings from these intangible exports have also slowed sharply after growing about 28% to $325 billion in 2022-23. As per estimates, services exports have grown just 5.2% to $80 billion, while goods exports stand at a little over $102 billion through the first quarter.

Different scenarios, different goals

“Our broader target for exports, as per the new Foreign Trade Policy, is to achieve $2 trillion by 2030, with services and goods exports accounting for a trillion dollars each. But the way things are shaping up so far, in line with the World Trade Organisation’s forecast of slower global trade growth in 2023, it is perhaps not right for us to set a singular target,” the official explained.

“We are waiting and watching. The first quarter numbers have given us some indication and we hope overseas orders start picking up. However, instead of a single target, an exercise is being done to formulate a range of possible export goals, based on scenarios such as the most optimistic scenario, a ‘business-as usual’ situation, and if there’s a persistently declining trend. So we need to wait for some more time,” the official emphasised.

On petroleum exports, which have seen the sharpest plunge of 33.2% in the first quarter, another official said that this was largely driven by the reduction in global oil prices. However, there is also some moderation in demand due to the price cap sanctions imposed on Russian oil shipments. Last year, petroleum exports had boomed as Indian firms processed and re-exported large volumes of Russian oil, he said.

India’s gems and jewellery exports are likely to decline by 10 to 15% in the current financial year on account of slowing demand in key markets like the U.S. and China, GJEPC Chairman Vipul Shah has said.

The gems and jewellery exports grew 2.48% year-on-year to ₹3,00,462.52 crore (over $36 billion) in FY23, according to the Gems and Jewellery Export Promotion Council (GJEPC).

Addressing the media, on the sidelines of an event here on Monday evening, the GJEPC Chairman informed that the Commerce Ministry has given a target of $42 billion for the gems and jewellery segment exports in 2023-24.

“For gems and jewellery, the major contributing market is the U.S. and China, the demand is slowing there. Rising interest cost, inflation, all these concerns and consumers’ confidence is also going down,” Mr. Shah said.

Going ahead, “we expect that overall we should see a 10 to 15% decline in the gems and jewellery exports,” he said on GJEPC estimates for the current fiscal ending March.

Diamonds constitute more than 55% of the overall gems and jewellery export basket, Mr. Shah informed.

The exports target (for the current fiscal) is $42 billion which was given by the Ministry of Commerce, he added.