Indian carmakers had a real Octoberfest, posting an impressive 22% growth in October by selling about 2.66 lakh units, making it the third highest sales despatch in a month in the history of Indian automotive industry. The two-wheeler segment, which had been trudging along, also broke into double digit - 10% -- growth in the same month.

Seven of the top 10 carmakers have posted double digit growth, helped by new launches, attractive offers along with low fuel prices and single digit interest rates. And four of top five two-wheeler companies have recorded a double digit growth, with Hero and Honda posting their highest ever sales in a month.

This double digit growth has come on a relatively higher base of October 2014 which saw both Dussehra and Diwali falling in the same month.

While the double digit growth in October is in despatches from factory to dealerships and not to end consumers, industry players say the offtake in the market has been healthy and inventory situation is good to meet the demand in November because of Diwali.

The top five car makers -- Maruti Suzuki, Hyundai Motor India, Honda Cars India, Mahindra & Mahindra and Tata Motors -- have all posted double digit growth, whereas the launch of Kwid and Figo and Figo Aspire have helped Renault and Ford India to post double digit growth as well.

On the two wheeler front, Honda Motorcycle & Scooter India posted its highest ever sales of 4.49 lakh units, posting a growth of 19% driven by strong Dussehra sales, while its rivals Hero MotoCorp, TVS Motor, Yamaha and Royal Enfield all posted double digit growth too, with the only exception being Bajaj Auto, which slipped 8% in October.

Rakesh Srivastava, Sr. VP- sales and marketing at Hyundai Motor India Limited, said, "The company's sales of 47,015 units are at a record high with an all-time high sales of Grand i10 with 14,079 units and continued strong performance of Creta and Elite i20/Active with 18,244 units.

The company is hoping to reduce the waiting period with maximised production. "We expect the growth momentum to continue in the coming months with improving customer sentiment," said Srivastava.
Pravin Shah, president & chief executive, Automotive) at M&M Ltd, said the advent of the festive season has provided the much needed fillip to the auto industry, especially on the back of the new launches of most manufacturers which has received an encouraging response.

"With the drop in interest rates and fuel prices remaining benign, we expect the industry to maintain a good growth momentum. We are quite hopeful of this positive growth momentum continuing for the rest of the year," said Shah.

Interestingly, October was a third month of double digit growth in FY16 for passenger vehicles, after April (16.5%) and July (12.6%) of this year, with intermittent months witnessing lower single digit growth, said experts.

Gaurav Vangaal, senior analyst for forecasting at IHS Automotive, said these numbers are seeing a purely cyclical upturn due to festive season.

"I do not see such high numbers for the rest of the year. Once the festive season is over, I expect volumes to come down. There will be growth expected, but it will be limited, companies have to rely on year-end discounts to maintain the momentum," said Vangaal.

Carmakers, however, are confident of sustained demand momentum for the next few months, but to suggest whether the recovery is strong enough will only be visible by sales number of January, February and March.

"Only if we see three consecutive months of double digit growth discounting the seasonality, then only we can suggest that the recovery is truly in place," Srivastava concluded.