Green Shoots of Recovery?


By and large, in keeping with the trends for over 18 months, auto market remained subdued in September 2013. There was no respite from challenging economic conditions, unrelenting inflation, higher fuel prices and interest rates, leading to downbeat sentiment.

The good news is that two-wheelers, while sustaining the growth momentum picked up two months ago, stayed on course to clock an impressive 18.4% year-on-year rise in domestic sales at 1,265,704 units in September 2013. Even in the case of cars and utility vehicles, September was the best month in terms of absolute numbers this fiscal. 

Passenger cars and utility vehicles have swapped places in terms of growth pattern. While passenger vehicle sales in domestic market went up marginally for the second consecutive month rising by 0.7% y-o-y to 156,018 units, the domestic sales of utility vehicles at 42,442 units stayed in negative terrain, declining by 12.0% during the month of September 2013.

Bearing the brunt of the slowing economy and economic activity, commercial vehicles continued to slide, as domestic CV sales dived by 27% y-o-y to 51,680 units in September 2013. Medium & heavy commercial vehicles – the barometer of economic health – were down by massive 41.8% in September with their domestic sales falling to 15,473 units.

Thanks to the robust performance of two-wheelers, the total domestic sales volume of vehicles across categories rose year-on-year by 11.6% and the exports by 17.0% during the month. 

Car market leader Maruti Suzuki India (MSI) sold a total of 104,964 units (including 14,565 units of export) in September 2013, growing by 11.7% over total sales tally of 93,988 units in September 2012. Domestic sales at 90,399 units posted a paltry growth of 1.8%, while exports soared by 180.8% y-o-y to 14,565 units in September 2013. The compact sedan Swift DZire recorded a whopping 42.9% rise in domestic sales to 20,828 units during the month.

Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer and the largest passenger car exporter clocked 30,601 units of domestic sales in September 2013, which represents a 0.8% drop y-o-y. The exports at 20,817 units in September 2013 declined by 8.3% from the corresponding figure of 22,706 units a year earlier. Total sales comprising domestic sales and exports aggregating 51,418 units in September 2013 were down 4.0% y-o-y

Commenting on the sales, Rakesh Srivastava, Sr Vice President, Sales and Marketing, HMIL said, “In the current market scenario, volume growth is a big challenge. Last month, we launched our new model Grand in the midst of slowdown and have received phenomenal response from our customers. We expect the market challenges to continue and have a cautious optimism for upcoming festive season.”

Honda Cars India Ltd (HCIL) reported a growth of 88.0% in domestic sales during September 2013, clocking 10,354 units as against 5,508 units sold during the corresponding month in 2012.

Model wise domestic sales break-up of HCIL for September 2013: Brio – 1,452 units; Amaze – 6,679 units; City – 2,043 units; Accord – 46 units; and CRV – 134 Units.

Jnaneswar Sen, Sr VP – Mktg & Sales, HCIL, said, "Honda Cars has outperformed despite a consistent slump in the demand of passenger cars over the past 8 months. We are happy to see the huge demand for Honda Amaze and Brio. The sales figures have set a positive tone for the upcoming festive season. And to add fresh excitement during the festive season, we have introduced the 'Exclusive' edition of Honda Brio.”

Ford India posted a healthy 36.5% increase in its domestic sales to 10,640 units in September 2013 as against 7,794 units in the same month last year on the back of its newly launched compact SUV EcoSport.

"Despite prevailing difficult economic conditions, we are excited to see our products finding greater acceptance among customers that is mirrored in our sales,” Vinay Piparsania - Executive Director (Marketing, Sales and Service), Ford India said.

Toyota Kirloskar Motor (TKM) saw its sales volume in India go down marginally by 0.8% from 12,115 units a year ago to 12,015 units in September 2013.

"The market continues to be sluggish. We hope that the market will improve with the upcoming festive season," remarked Sandeep Singh, Deputy Managing Director and COO (Marketing and Commercial), TKM.

Mercedes-Benz India continued its growth momentum, registering best ever monthly sale of 1,011 units in September 2013 (September 2012: 654 units) on the back of strong performance from all major products including the A-Class and B-Class New Generation Cars; E-Class luxury sedan; and the SUV range comprising M-Class and GL-Class.

Eberhard Kern, Managing Director & CEO, Mercedes-Benz India commented: “Fundamentally strong brands like Mercedes-Benz perform robustly amidst challenging market conditions and it reiterates the fact that the Three Pointed Star remains to be the most preferred luxury auto brand amongst customers. Our Year of Offensive strategy has yielded satisfactory result as we continue to improve our strong performance with each quarter, amidst one of the toughest market situations faced by the industry.”

Meanwhile, homegrown auto major Tata Motors' passenger vehicle sales in the domestic market remained on a sticky wicket, plunging by 41.7% to 12,460 units in September 2013 from 21,357 units a year-ago. Domestic sales of Tata commercial vehicles at 33,498 units were down 31.7% y-o-y.

Mahindra & Mahindra (M&M) sold total 40,574 units, including UVs, 3-wheelers and CVs, in domestic market during September 2013, recording a negative growth of 10.4% vis-a-vis 45,263 units in the same month last year. The company’s PV sales in the local market stood at 18,916 units, down 20.5% y-o-y.

"While there has been a growth over August 2013, it is not to the extent that makes us comfortable, especially as we approach the festive season," M&M Chief Executive (Automotive Division) Pravin Shah said.

General Motors India (GMI) posted a 4.7% decline in domestic sales at 7,048 units in September 2013 from 7,396 units a year earlier.

P Balendran, Vice President, GMI said, “The market continues to remain depressed due to weak economic conditions, negative market sentiments and various other factors. However, the company expects the market to show some improvement closer to the festive season.”

The general trend of two-wheeler companies putting up a much better show in the Indian market continued with all two-wheelers majors, barring Bajaj Auto, posting healthy growth in September.

Market leader Hero MotoCorp reported a 15.7% rise in its domestic sales to 455,786 units in September 2013 from 393,852 units in September 2012. Total sales, including exports, aggregating 468,670 units were up 15.8%.

Honda Motorcycle & Scooter India (HMSI) continued its dream run, clocking a 34.8% y-o-y surge in its domestic sales to 311,977 units in September 2013.  With exports contributing 16,945 units and rising by handsome 45.2%, total sales volume of HMSI in September soared by 35.3% y-o-y.

Chennai-based TVS Motor witnessed a 13.0% uptick in its domestic sales of two-wheelers to 168,598 units in September 2013, compared with 149,191 units in September last year.

Suzuki Motorcycle India, growing by 7.5%, sold 40,839 units in Indian market during the month of September 2013.

Similarly, India Yamaha Motor saw its domestic sales volume grow by whopping 52.7% y-o-y to 46,790 units in September 2013.

Bajaj Auto was the only two-wheeler major to have registered a negative growth of 1.9% in domestic sales at 202,310 units in September 2013. However, the company made up for the loss in domestic market with impressive export performance. The export of company’s two-wheelers, accelerating by 11.5% to 121,569 units, ensured a 2.7% growth in its total sales at 323,879 units.

Riding on good monsoon, two-wheelers are leading the way for the auto market to pick up in the second half of the fiscal. However, the uncertainty continues to cast its shadow over the economy, denting the consumer sentiment. The auto market, while hoping for a turnaround in its fortunes, is keeping its fingers crossed.




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