Auto Market’s Slide Continues in April

The advent of new financial year failed to lift the mood of auto market in Asia’s third largest economy. The downward spiral of vehicle sales, continued unabated, as all segments of market, barring 3-wheelers, reported tepid sales in April.

The decline was all the more palpable in the case of passenger cars that witnessed a 10.4% fall y-o-y in domestic sales to 150,789 units in April 2013.  It was the sixth straight month of contraction in car sales. Worrisome signals emerging from the market are that UVs, which have been clocking healthy double-digit growth for some time, saw a paltry 4% increase in domestic sales at 40,563 units during the month. Overall, the domestic sales of passenger vehicles at 208,386 units posted a negative growth of 8.2%.

Reflecting the challenging economic environment, the sales numbers of commercial vehicles too were not something to write home about. Lack of buoyancy in the economy continued to weigh on the domestic sales of commercial vehicles that barely managed to stay in positive territory with a measly 0.75% growth y-o-y, thanks yet again to LCVs, which witnessed 4.8% uptick in domestic sales.

M&HCVs are the worst hit by the slowing economy. The domestic sales M&HCVs, which mirror the health of economy, stayed in the negative terrain and were down 6.7% to 18,610 (19,937) units in April 2013.

Likewise, the showing of two-wheelers in April 2013 was equally unflattering.  The sales of two-wheelers, which bucked the slowdown blues even during the worst global economic depression in the latter half of 2008 and continued to grow at decent pace till late 2012, have been tapering off for some time now. The month of April 2013 registered a bare 1% increase in domestic sales of two-wheelers to 1,168,080 units.

3-Wheelers stood out amid none-too-enthusing scenario, notching up a 7.2% growth in domestic sales at 34,348 (32,044) units during April 2013. The exports of 3-wheelers at 35,214 units were also in fast lane, rising by 18.5% y-o-y in April 2013.

Car market leader Maruti Suzuki India Limited (MSIL) sold 90,523 units in April 2013 in the domestic market, which translated into just 0.3% growth over 90,255 units in April 2012. Total sales of MSIL, including exports,  in April 2013 at 97,302 saw a 3.1% drop in April 2013 compared to 100,415 units in April last year, with exports falling sharply by 33.3% y-o-y to 6,779 units during the month. Compact cars, including Swift, Ritz and Estilo, the mainstay of MSIL, took a major hit with a negative growth of 17.4% y-o-y.

Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer and the largest passenger car exporter, registered a 7.6% fall in domestic sales to 32,403 units in April 2013 from 35,070 units a year ago. The company’s exports at 24,551 units during the month clocked an impressive 25.7% growth y-o-y.

Rakesh Srivastava, Sr Vice President, Sales and Marketing, HMIL said, “The exports have shown good growth on account of strong demand from non-European markets, while the domestic market continues to witness pressure. There are signs of recovery with the increase in demand for petrol cars, though. In current difficult times, HMIL is continuously gaining market share.”

Buoyed by the launch of its family sedan Amaze, Honda Cars India Limited (HCIL) posted domestic sales of 8,488 units in April 2013 as against 7,075 units in the corresponding month last year, clocking a 20% uptick.

Model wise sales break-up of HCIL during April 2013 read as follows: Brio – 1,628 units; Amaze – 4,852 units; City – 1,917 units; Accord – 33 units; and CR-V – 58 units.

Expressing delight on the company’s performance, Jnaneswar Sen, Sr Vice President – Marketing & Sales, HCIL, said, "April 2013 was a significant landmark in Honda’s journey in India. With new investments in Tapukar plant, launch of advanced i-DTEC diesel engine technology, and rollout of new family sedan Amaze, Honda has set on a new phase of growth in the country. Amaze has received tremendous response from the customers despite the slowdown in the industry. We are confident that Amaze will drive our growth in this fiscal."

The dream run of Mahindra & Mahindra Ltd (M&M) encountered a bump. M&M’s total auto sales volume, including Mahindra Navistar & exports, aggregated 41,432 units in April 2013, which represented a meagre 1.8% rise over 40,715 units during April 2012. The company’s domestic sales stood at 39,902 units during April 2013, staying more or less flat. 

Domestic sales of M&M in PV segment (which includes the UVs and Verito) crawled up 1% to 20,748 units in April 2013 from 20,554 units during April 2012. 

Pravin Shah, Chief Executive, Automotive Division, M&M said, “We are extremely disappointed that the additional 3% excise duty on SUVs has not been reversed in the Finance Bill, which would have brought about some cheer and momentum for SUV makers and provided them a level playing field. We remain cautiously optimistic of the current situation and do hope that with the much awaited and needed reduction in interest rates, the auto industry will look up.” 

Toyota Kirloskar Motor (TKM) sold 9,007 units in the Indian market in April 2013 as compared to 14,378 units in the corresponding month in 2012, witnessing a negative growth of 37%. TKM exported 1,449 units of Etios series to South Africa in April 2013. Total sales (including exports) stood at 10,456 units, which reflected a massive 42.0% de-growth vis-à-vis the company’s sales tally of 18,017 units a year ago.

Commenting on the sales in April 2013, Sandeep Singh, Deputy Managing Director and Chief Operating Officer, Mktg & Commercial, TKM, said “The market continues to be sluggish and is expected to take some time to revive. We have taken measures to reduce inventory, both at our and at the dealers’ end.”  

Ford India sold 7,270 vehicles in combined domestic wholesales and exports during April 2013, as against 9,569 vehicles in the same month last year, witnessing a 24% drop. Domestic sales of Ford India totalled 4,003 units in April 2013, plummeting by 44.4% y-o-y.

“We are encouraged to see exports growing at a steady pace and we remain deeply optimistic about our business in India, as we continue to expect growth in the long term,” said Vinay Piparsania, Executive Director, Marketing, Sales and Service, Ford India. 

Tata Motors stayed on sticky wicket. Total sales (including exports) of Tata commercial and passenger vehicles in April 2013 added up to 51,160 units, slipping by 14.1% from 59,525 units a year earlier. Domestic sales of Tata commercial and passenger vehicles were down 16.9% y-o-y to 47,595 during April 2013. 

Tata Motors had the consolation of seeing its CV sales in domestic market rise by 2.8% y-o-y to 36,158 units. Tata M&HCVs that have been reeling under sluggish economic conditions posted a 1.8% y-o-y growth in domestic sales at 10,002 units in April 2013.

Badly dented, passenger vehicle sales of Tata Motors in Indian market remained in reverse gear, plunging by 48.3% to 11,437 units in April 2013 from 22,133 units a year ago.

In keeping with the uncertain economic situation, domestic sales of Ashok Leyland fell by 16.3% to 6,452 units in April 2013 from 7,712 units in April 2012.

With slowing economy taking its toll, two-wheeler players in Indian market, except for HMSI, did not have much to cheer about.

HeroMotoCorp remained in negative terrain with its domestic sales declining by 8.7% y-o-y to 488,230 units in April 2013. Total sales of Hero MotoCorp, including exports, were down 9.2% y-o-y.

Bajaj Auto’s domestic sales of two-wheelers numbering 199,838 units in April 2013, slipped by 0.2% y-o-y. Exports of Bajaj two-wheelers fell steeply by 28.9% y-o-y to 100,989 units during the month.

TVS Motor stayed in negative terrain, with its domestic sales of two-wheelers dipping by 5.5% y-o-y to 142,794 units in April 2013. 

Honda Motorcycle & Scooter India (HMSI) continued to make inroads into the two-wheeler market. Domestic sales of HMSI posted a stupendous 28.8% growth at 249,305 units in April 2013. The company’s exports were also on high-growth trajectory, rising by whopping 84.3% y-o-y to 10,304 units during the month.

Indian auto market is currently going through a rough patch. However, there are straws in the wind, which fuel hope of early recovery. Inflation is at 3-year low, fuel prices are climbing down and the interest rates are likely to soften with the cut in Repo rate. Auto market is, therefore, expected to shift gears and regain momentum in the second half of current fiscal.


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