Auto Market Ends the Year 2013 on a Dismal Note


India’s automobile sales continued to remain sluggish in December 2013, falling into the pattern during the year 2013, except for the month of October 2013 when the auto market witnessed a semblance of uptick, fueling fallacious hope of revival. Slowdown in economy giving rise to uncertainty and weak business & consumer sentiment, coupled with unrelenting inflation played the spoilsport. 

The downturn during the year 2013 was the worst the auto market had ever witnessed. The slowdown was all-pervasive cutting across segments, barring two-wheelers that witnessed a modest growth of 2.3% in domestic sales during the month.

Bugged by downbeat sentiment and higher fuel prices & finance cost, passenger vehicles stayed in negative terrain with domestic sales falling by 9.0% to 186,161 units. Total sales of passenger vehicles, including domestic sales and exports, at 238,681 units were down 7.1% y-o-y in December 2013. Car sales in domestic market dropped 4.5% y-o-y to 132,561 units, while UVs that had recorded healthy growth during the year 2012-13 saw their domestic sales fall sharply by 36.1% to 40,348 units. 

Commercial vehicles, barometer of economic health, continued their slide indicating the deepening of economic slowdown. Domestic sales of commercial vehicles at 46,757 units declined by 25.5% y-o-y. Ditto for 3-wheelers, the domestic sales of which were down 21.2% y-o-y to 35,249 units during the month. Commercial vehicles have been reeling under severe recession for about 2 years. “Commercial vehicles are badly hurt due to lack of mining activities and stalled infrastructure projects. The industry hasn’t yet bottomed out and there are no immediate signs of revival,” noted SIAM.

Bucking the trends, however, two-wheelers continued to grow, albeit at a slower pace, led by strong rural demand.  The year 2013 saw a change in the pecking order, when HMSI emerged as No. 2 player in the Indian market, overtaking Bajaj Auto in the process and becoming a strong challenger to Numero Uno Hero MotoCorp.

Total sales volume (including exports) of car market leader, Maruti Suzuki India (MSI) stood at 90,924 units in December, 2013, as against 95,145 units in the same month of last year, registering a 4.4% dip.  While domestic sales grew by 5.5% y-o-y to 86,613 units, the exports plummeted by whopping 67.0% from 13,072 units a year ago to 4,311 units in December 2013. The mini segment, comprising M800, Alto, A-Star and WagonR and super-compact segment including Swift DZire clocked y-o-y growth of 16.7% and 18.0%, respectively, helping the company post a modest growth in domestic sales during the month. 

Thanks to the positive response to Grand i10, Hyundai Motor India Ltd (HMIL), the second largest manufacturer of passenger vehicles, turned in a somewhat better performance, growing by 6.2% y-o-y to 28,345 units in terms of domestic sales during the month of December 2013. The company’s exports were, however, down 1.9% to 20,724 units in December 2013 from 21,136 units in the same month previous year.

Commenting on the sales, Rakesh Srivastava, Sr VP - Sales & Marketing, HMIL said, “Year 2013 was very challenging and rewarding. With December retails of 45,911 units, Hyundai achieved its Annual Business Plan and the highest market share since inception. Manufacturing operated at 99.0% capacity utilization and had the fastest 5 million rollout in India. In 2014, Hyundai will launch many new products and new initiatives to build further on this positive momentum."

Honda Cars India Ltd (HCIL) clocked 5,493 units of domestic sales in December 2013 compared with 4,242 units sold during December 2012, registering a growth of 30%. Model wise domestic sales break-up of HCIL for December 2013 read as follows: Brio - 1,026 units; Amaze – 4,458 units; and  Accord – 9 units. 

"Year 2013 has been very good year for HCIL business, as we crossed one lakh units in domestic sales for the first time in a calendar year with a total sales volume of 107,661 units during Jan – Dec 2013. The new Honda City has received an overwhelming response after its global preview in November 2013. We expect the growth momentum to continue in the New Year," Jnaneswar Sen, Sr Vice President – Marketing & Sales, HCIL, said.

Despite substantial numbers contributed by its compact SUV – EcoSport, Ford India reported lower local sales in December. The Indian arm of the US car maker witnessed a 9.9% y-o-y drop in domestic sales to 5,871 units in December 2013. 

“Despite difficult economic and business environment, 2013 has been a remarkable and rewarding year for Ford in India,” said Vinay Piparsania, Executive Director - Marketing, Sales and Service, Ford India. “With several months of sustained sales performances and Ford EcoSport recognized with major awards in its debut year, we are excited to conclude the year with our products finding greater acceptance from customers and media.” 

The local arm of Toyota, viz. Toyota Kirloskar Motor (TKM) saw its December sales decline 11.8% from a year earlier to 10,648 units in December 2013. “The market sentiments do not seem to be improving. In the last few months, we have made our best efforts to control inventory both at our end and at our dealers’ end,” said Sandeep Singh, Deputy MD and COO, Marketing & Commercial, TKM.

It was an equally bad month for General Motors India (GMI). Domestic sales of the firm fell 19.1% to 5,705 units in December 2013 from 7,048 units a year earlier.

The homegrown players did not have much to cheer about.

Mahindra and Mahindra (M&M), stayed in a deceleration mode, witnessing a steep 26.9% fall in its UV sales in domestic market, which stood at 15,881 units in December 2013 as against 21,735 units in December previous year. Total domestic sales of M&M, including UVs, 3-wheelers, trucks and buses, were down 22.5% y-o-y to 23,433 units.

“During first nine months of the current fiscal, the auto industry has seen a negative growth due to sustained deceleration in economic activity and consequent weakness in consumer and business sentiments,” said Pravin Shah, Chief Executive, Automotive Division, M&M. 

Total domestic sales of Tata Motors Ltd (TML) stood at 35,010 units in December, 2013, reflecting a massive 43.3% downswing on YoY basis. TML’s CV sales volume in domestic market declined sharply by 45.6% y-o-y to 25,888 units in December 2013, while that of passenger vehicles were down 35.2%  to 9,122 units from the year-ago figure of 14,087 units. 

Ashok Leyland Ltd (ALL)’s  domestic sales at 5,558 units were equally unflattering and down 17.3% from the domestic sales tally of 6,719 units a year ago.

As in the recent past, the sales performance of two-wheelers was the only saving grace for Indian auto market.

Honda Motorcycle and Scooter India (HMSI) continued to make rapid strides in Indian market, the company’s domestic sales soaring by 41.9% y-o-y to 282,684 units in December 2013. HMSI’s exports were however, in negative terrain falling by 25.8% y-o-y to 13,560 units during the month.

Hero MotoCorp, reported total sales (including domestic sales & exports) of 524,990 units in the month of December, 2013, contracting by 3.1% from the corresponding sales figure in December 2012, when the company had sold 541,615 units. While the company’s domestic sales dipped by 2.4% to 514,830 units, the exports at 10,160 units were down 28.7% y-o-y.

Bajaj Auto recorded sales of 135,567 two-wheelers in the Indian market during the month of December 2013, which represented a sharp 31.7% fall y-o-y.  The company, however, came up with a spectacular performance in two-wheeler exports that surged by 25.1% y-o-y to 125,078 units during the month.

TVS Motor Company sold 132,664 two-wheelers in domestic market during the month of December 2013, reflecting a 1.4% drop y-o-y.  The company’s performance in two-wheeler exports was impressive. The two-wheeler exports totaling 20,694 units during the month were up 20.5%.

India Yamaha Motor witnessed a phenomenal growth of 58.3% in its domestic sales volume that stood at 39,777 units in December 2013. On the other hand, Suzuki Motorcycle’s sales in the domestic market slumped 43.8%  y-o-y to 18,732 units in December, 2013.

High interest rates, volatile fuel prices and an uncertain economic environment did not allow the auto market to get going in 2013. The experts do not see the auto market shifting gears during the first half of 2014 due to the challenges confronting the economy.The introduction of new models at the Auto Expo next month may create excitement in the market to some extent




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