Auto Market on a Comeback Trail

 

Auto market in India is gradually picking up and the buoyancy is returning slowly but surely, riding on the lower prices as a result of excise duty cut and improved sentiment arising from the formation of a stable Government at the Centre. As the sales numbers for the month of June 2014 suggest, things have started looking up and the green shoots of recovery seem to be firming up, particularly across the beleaguered passenger car and commercial vehicle segments.

Passenger Vehicles gaining traction

Passenger vehicle sales rose for the second month in a row as buyer footfalls increased in showrooms. What also helped passenger vehicle market in June was a slew of handsome discounts & freebies, new car launches and expectation of hike in prices from July 1. Passenger vehicle sales volume in the domestic market grew by a decent 11.2% to 218,828 units in June 2014 from 196,726 units a year ago. Passenger vehicle exports were also on high growth trajectory rising by 22.0% y-o-y to 51,533 units during the month.

Car market leader, Maruti Suzuki India (MSI), set the pace of passenger vehicle sales growth, reporting domestic sales of 100,964 units in June 2014 - up 31.1%  over the corresponding sales tally of 77,002 units in June last year. In June 2014, the company’s quartet of entry level cars – Maruti 800, Alto, A-star and Wagon R – sold a total of 47,618 units in domestic market on the back of attractive discounts & offers, soaring by a whopping 52.1% (June 2013: 31,314 units) in the process. The premium compact cars – Swift, Estilo, Ritz and Celerio – contributed 22,293 units in domestic sales, recording a 6.2% uptick. Meanwhile, the Dzire sedan continued to contribute substantial sales numbers for Maruti Suzuki. The car clocked domestic sales of 15,990 units in June 2014, recording 27.4% growth (June 2013:12,548). On the export front, MSI shipped 11,809 units in June 2014, which translated into a handsome 58.4% growth over 7,453 units in June 2013.

Hyundai Motor India Ltd (HMIL), the second largest carmaker in India and the country’s largest passenger car exporter, registered domestic sales of 33,514 units, which reflected a growth of 9.5% (June 2013: 30,610). However, the company’s exports faced rough weather, witnessing a 29.3% drop in June 2014 with despatches of 17,004 units (June 2013: 24,057).

Commenting on June 2014 sales, Rakesh Srivastava, Senior Vice President - Sales & Marketing, Hyundai Motor India, said, “Hyundai, with domestic sales volume of 33,514 units, has grown by 9.5% over last year on the phenomenal success of the Xcent, Grand and Santa Fe. With the extension of excise duty benefit, we hope to maintain the growth in volume while strengthening our product portfolio and improving channel efficiencies.”

For Honda Cars India, the Amaze and City sedans stayed in fast lane to power the company’s domestic sales to 16,316 units in June 2014, which reflected an impressive 75.5% growth year-on-year. Amaze and new City sedan made handsome contributions, selling 7,075 and 7,723 units respectively during the month. The Brio hatchback sold 1,438 units and the CR-V 80 units. Honda also exported a total volume of 739 units during June 2014. 

Jnaneswar Sen, Senior Vice President – Marketing & Sales, Honda Cars India, said, “We extend our gratitude to customers for the continuing success of the Amaze and new City and are confident that we will continue to do well. We are very excited about the upcoming launch of our stylish seven-seater Honda Mobilio at the end of this month and are confident that it will attract Indian consumers with its strong desirable values.”

Nissan Motor India witnessed a healthy 48.1% increase y-o-y in its domestic sales that stood at 4,362 units in June 2014, with of Datsun Go contributing 1,097 units. Nissan’s exports surged by a whopping 200.6% y-o-y to 9,869 units during the month.

With domestic sales tally of 7,258 units, Ford India registered a marginal growth of 1.6% in June 2014 (June 2013: 7,145). Together with exports of 4,677 units, the company recorded a decent year-on-year growth of 36.1% in its total sales that added up to 11,935 units during the month. 

Toyota Kirloskar Motor (TKM) sold 12,010 units in the Indian market during the month of June 2014 - a 9.1% rise over domestic sales figure of 11,010 units in June 2013. N Raja, Director and Senior Vice - President, Sales and Marketing, TKM, said, “We sold 922 units of the Altis and 626 units of the Etios Cross. We have received over 5,400 bookings for the Etios Cross and more than 3,000 for the Corolla Altis .The waiting period for the Etios Cross is over 3 months and more than 2 months for the Corolla Altis. We are currently working towards reducing the waiting period.”

Meanwhile, stemming the slide, Mahindra & Mahindra (M&M) registered a modest growth of 3.6% in domestic sales of UVs, which added up to 16,492 units in June 2014 (June 2013: 15916 units). However, domestic sales of Mahindra passenger vehicles comprising UVs and the Verito range were down 2.6% y-o-y to 16,780 units during the month.

Another home grown player, namely, Tata Motors did not have much to cheer about, with domestic sales of its passenger vehicles plummeting by 32.1% y-o-y to 7,845 units in June 2014. While domestic sales of its Indica/Indigo range were down 38.4% to 5,933 units, UV sales of Tata Motors in domestic market at 1,912 units witnessed a 0.5% de-growth y-o-y during the month.

General Motors India saw a 21.4% decline in its local sales to 5,165 units in June 2014 from 6,575 units in June 2013.

Two-Wheelers on Course

The two-wheeler segment that has, for long, been the mainstay of Indian auto market, helping keep overall sales in positive territory in terms of numbers, continued to drive ahead in June 2014. 

Numero Uno, Hero MotoCorp (HMCL) reported a 7.8% increase in its domestic sales to 530,560 units in June 2014 over 492,157 units in June 2013.

In June, Hero MotoCorp commenced production at its fourth manufacturing plant at Neemrana in Rajasthan and also started despatch from the plant to the market. With the commissioning of the plant, which has an installed capacity of 750,000 units, Hero MotoCorp now has a total annual installed capacity of 7.65 million units of two-wheelers.

Honda Motorcycle & Scooter India (HMSI) stayed in top gear, notching up a 28.5% increase in domestic sales to 309,387 units (240,853 units) during June 2014. 

Yamaha Motor India Sales clocked a 14.4% growth, selling 40,666 units in domestic market during June 2014 as against 35,561 units sold in June last year.

Domestic two-wheeler sales of TVS Motor Company increased by 22.7% from 137,330 units in June 2013 to 168,531 units in June 2014. The company’s exports of two-wheelers numbering 26,257 units during the month recorded a healthy 31.2% rise.

Reporting its best-ever monthly sales, Chennai-based Royal Enfield posted sales of 25,303 motorcycles (including exports) during June 2014. The monthly sales in domestic market stood at 24,519 units, which marked a whopping 84.2% growth over the 13,315 motorcycles sold in June 2013. 

Mahindra Two Wheelers (MTWL) recorded domestic sales of 14,369 units in during June 2014, up 83.1% over June last year, when it had logged sales of 7,849 units. 

Notable exception among the two-wheeler majors was Bajaj Auto that witnessed a 7.5% drop in domestic sales of its two-wheelers, which stood at 147,690 units in June 2014 compared with 159,688 units a year ago. However, the company’s exports of two-wheelers growing by 20.7% y-o-y to 114,512 units during the month made good more than the loss in domestic market. Total two-wheeler sales of Bajaj Auto at 262,202 units were higher by 3.0% y-o-y.

Indian CV market, though still in negative terrain, slowly picking up 

The return of passenger vehicle sales to the positive growth curve seems to be rubbing off on commercial vehicle segment, amid improved business sentiment, thanks to the new stable government and anticipation of bigger infrastructure spend and reforms. Commercial vehicles stayed in negative terrain in June 2014 even as there has been a sequential increase in the sales numbers since the advent of FY’15.

Tata Motors’ CV sales in domestic market slid 27.6% to 26,898 units in June 2014 from 37,163 units a year earlier.

Ashok Leyland posted positive sales numbers in June 2014, clocking a growth of 3.2% in CV sales in the Indian market to 6,670 units vis-à-vis 6,466 units in June 2013.

VE Commercial Vehicles witnessed a 12.4% rise in CV sales in the domestic market to 3,474 units in June 2014 from 3,090 units in June 2013.

Auto market is optimistic that things can only get better from now on, notwithstanding the recent hike in petrol & diesel prices. However, the current drought-like conditions across major part of the country and threat of below-normal monsoon, is a cause of worry.

 

 

 

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