Diwali  Fails to Light Up Mood

With feverish festivities approaching, there was a sense of anticipation and a buzz of expectancy in the air. The auto market that has been witnessing sluggish demand for about one year was waiting to celebrate Diwali with a bang, but it all ended up with a whimper.

All segments of auto market, except for two-wheelers, continued to see fewer footfalls and tepid sales volumes in October 2013, as the mother of all Indian festivals, when the people in India go on big spending spree, failed to light up the mood. 

Domestic passenger car sales dipped by 3.9% y-o-y in October 2013. Notably, 163,199 units were sold as compared to 169,788 units in the corresponding month of 2012. UVs, after having been in sliding mode for the past few months, put up a better show with 7.0% rise in domestic sales at 57,020 units during the month. Passenger vehicle segment, comprising cars, UVs and vans, saw a 2.0% de-growth, domestic sales sliding from 244,054 units a year ago to 239,137 units in October 2013. Exports of passenger vehicles at 46,119 units and rising by 6.8% y-o-y made a handy contribution, but could not help sales tally turn positive for passenger vehicles.

Commercial vehicles, bearing the brunt of slowing economy for 20 months, remained in the negative terrain, the domestic sales falling by 19.8% y-o-y to 53,533 units in October 2013. Reflecting the sluggish economic activity, M&HCVs continued to witness free fall, crashing by 31.6% to 14,261 units in October 2013. LCVs that had been shoring up the sales numbers of CVs have also fallen into a rut for some time. Domestic sales of LCVs slumped 14.4% y-o-y to 39,272 units in October 2013.

The saving grace for the auto market was the continuing buoyancy in the sales of two-wheelers, which registered a decent 18.0% growth in domestic sales that stood at 1,516,291 units in October 2013 vis-à-vis the year ago corresponding sales figure of 1,285,015 units. Reasonably good sales performance by two-wheelers for the last 4 months come as a whiff of fresh air amid gloom.

Thanks to the robust sales volumes of two-wheelers, total sales of vehicles in domestic market across various categories posted a growth of 12.6% to 1,858,386 units in October 2013 from 1,651,028 units in October 2012. 

The car market leader, Maruti Suzuki India (MSI) did not have much to cheer about, registering a paltry 0.1% rise in domestic sales to 96,062 units in October 2013 from 96,002 units a year ago. However, the company recorded a healthy 27.0% growth in exports at 9,025 units during the month. Total sales volume of MSI stood at 105,087 units in October, 2013, as against 103,108 units in the same month of last year, representing a 1.9% growth. The company’s domestic sales volume was propelled chiefly by its popular compact sedan DZire that grew 19.6% y-o-y to clock sales of 17,211 units in domestic market during the month.

Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer and the largest passenger car exporter posted cumulative sales of 50,212 units during the month of October 2013, which translated into a negative growth of 14.6% y-o-y. While the domestic sales accounting for 36,002 units, inched up marginally by 0.6%, the exports at 14,210 units witnessed a sharp 38.2% drop y-o-y in October 2013.

Commenting on October sales, Rakesh Srivastava, Sr Vice President, Sales & Marketing, HMIL said, “In this challenging market environment, sales have increased over last month by 17% on account of good monsoons, festival buying and strong sales of 11,519 units of new model Grand i10.” 

Mahindra & Mahindra (M&M) remained on a sticky wicket with domestic sales of its PVs falling by 14.9% to 22,924 units in October 2013 from 26,932 units a year earlier.

It was the same old story for another home-grown auto major, viz., Tata Motors that stayed in negative terrain. Domestic sales of Tata passenger vehicles plunged by 34.1% to 13,791 units in October 2013 from 20,914 units in the same month of 2012. On the other hand, the sales of Tata commercial vehicles dived by 29.8% y-o-y to 33,135 units during the month.

Likewise, Ashok Leyland, weighed down by the economic slowdown, could not get out of the rut, recording a 22.8% dip in domestic sales of commercial vehicles, which stood at 5,763 units in October 2013 as against 7,466 units in October last year.

Riding on the popularity and aggressive pricing of ‘Amaze’, Honda Cars India Ltd (HCIL) recorded a healthy growth of 38.7% during October 2013 selling 11,214 units in the Indian market, as against 8,085 units sold during the corresponding month in 2012. The company also exported 365 units of Honda cars in the month of October 2013.

Modelwise domestic sales break-up of HCIL dduring October 2013 is: Brio – 1,472 units; Amaze – 9,564 units; City - 31 units; Accord – 60 units; and CRV – 87 units.

"On the happy occasion of Diwali, we would like to thank our customers for making Amaze as the best selling model for HCIL, which has registered its highest monthly sales of 9,564 units during October 2013. HCIL is starting 3rd shift for production in our Greater Noida plant to reduce waiting period and aid in quick delivery of cars," Jnaneswar Sen, Sr Vice President – Mktg & Sales, HCIL, said.

Another Japanese player, Toyota Kirloskar Motor (TKM) registered total sales of 15,578 units in October 2013 as against 14,040 units in the corresponding month last year. The company sold 13,162 units in the domestic market, clocking a 7% growth over 12,281 units in October 2012. TKM exported 2,414 units of the Etios series during the month. 

Sandeep Singh, Deputy Managing Director and COO, Marketing and Commercial, TKM said, “October has seen good sales as the festive season has helped us in generating good numbers of enquiries and orders. Sales of all the models including the Innova, Etios, Liva, Fortuner and Corolla Altis have seen a positive growth during the month. The New Innova launched in October 2013 has received a very good response from our customers.” 

Ford India sold total 14,935 vehicles in domestic and overseas markets during October 2013, the best month in its history and a 36.4% uptick y-o-y. Ford India’s domestic sales were steady at 9,163 units in October 2013, compared to 7,577 units in October 2012, clocking a 21% increase. The company exported 5,772 vehicles in October this year, adding ten new export markets including Australia, Nicaragua, Honduras and Guatemala. This is an increase of 71% compared to 3,371 units exported last October. 

“At Ford India, we are extremely delighted by customers’ acceptance of our reliable, fuel-efficient and fun-to-drive products. Led by the Ford EcoSport, our product portfolio has helped our sales momentum amidst a challenging economic environment,” said Vinay Piparsania, Executive Director - Marketing, Sales and Service, Ford India. 

General Motors India (GMI) reported 14.2% growth in sales at 7,715 units in October 2013 over 6,754 units in the same month of 2012. GMI’s sales tally included 2,679 units of Beat, 1,837 units of Sail and 1,965 units of Enjoy.

Commenting on sales performance, GM India Vice-President P Balendran said: "The marginal sales rebound seen is on account of the festival season. Discounts are at its peak and sales of diesel vehicles are tapering off. The buoyancy in the market is completely missing and we don't see any sustained market upturn before a new government assumes office after general elections.”

Unfazed by the otherwise sombre mood, two-wheeler market sustained the growth momentum and had something to celebrate, as the two-wheeler sales saw a new high on the back of strong rural demand.

Two-wheeler market leader, Hero MotoCorp Ltd (HMCL) reported total sales of 625,420 units in the month of October, 2013, posting a healthy growth of 18.2% over 529,215 units in October 2012. While domestic sales grew by 19.2% to 614,124 units, the exports were down 19.2% y-o-y to 11,296 units during the month.

Two-Wheeler sales of TVS Motor in domestic market adding up to 173,229 units were up marginally by 1.8% y-o-y. The company’s two-wheeler exports rose by 4.0% to  16,750 units in October 2013.

Honda Motorcycle and Scooter India (HMSI) continued its dream run, posting a stupendous 52.6% growth in domestic sales at 360,150 units, while the exports climbed up by 8.9% y-o-y to 15,659 units in October 2013.

Bajaj Auto Ltd (BAL) was the only two-wheeler major to have recorded a negative growth of 12.5% in domestic sales that stood at 228,998 units in October 2013 vis-à-vis 261,771 units in the same month last year. However, the company’s exports continued on high growth trajectory, notching up a 20.0% rise in exports that read 119,325 units during the month.

The auto market's trauma still prevails as sales figures for the month of October 2013 reveal. The only silver lining is that there is an expectation of a robust performance of agriculture sector arising from bountiful monsoon this year, which is likely to give boost to the auto sales as well.

 

 

 

 

 

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