Anticipated Price Hike Drives Vehicle Sales in December

Vehicle sales recorded decent uptick in December, helped by hefty discounts and new models. The sales numbers were also boosted by the fear of rollback of excise duty sops from January 2015. 

Typically, vehicle manufacturers increase prices in the first month of the year in the range of 1-2%. This year, the hike is steeper, as tax breaks given to the auto sector in 2014 have not been extended beyond 31st December.

Passenger Vehicles 

With customers rushing to the showrooms to make most of the year-end offers and to beat the expected price increase effective from the New Year, domestic sales of passenger vehicles grew by 12.4% to 209,025 units in December 2014 from 185,951 units a year ago. The exports of passenger vehicles at 69,496 units were in overdrive notching up a healthy growth of 32.3% y-o-y.

Car market leader, Maruti Suzuki India (MSI) capped off its good performance during the year with a growth of 13.3% in domestic sales that added up to 98,109 units in December 2014 vis-à-vis the domestic sales tally of 86,613 units in December 2013. The company’s exports at 11,682 units in December 2014 soared by 171.0% y-o-y. Domestic sales of MSI in the mini car segment (Alto, WagonR) declined by 9.6% y-o-y to 34,625 units in December 2014. However, strong demand for the company’s range of vehicles in compact, midsize, UV and van segments boosted the overall sales volume in domestic market. The local sales of compact segment comprising Swift, Ritz, Celerio and Dzire, recorded a 23.0% upswing. Ciaz clocked 3,731 units of domestic sales.

The second largest car manufacturer, Hyundai Motor India Ltd (HMIL) sold 32,504 units in domestic market during the month of December 2014, which represented a 14.7% rise over 28,345 units a year ago. The exports were up 29.7% y-o-y to 26,887 units during the month.

Commenting on the December sales, Rakesh Srivastava, Sr VP - Sales & Mktg, HMIL, said, “In the challenging market conditions of CY 2014, Hyundai did all time record high sales of 4.11 lakh units with all time high projected market share of 21.8% in passenger cars on the strength of strong product portfolio, aspirational brand and customer focused strong channel.”

Honda Cars India Ltd (HCIL) was yet again the pick of passenger vehicle players in India, witnessing 162.7% surge in domestic sales that stood at 14,428 units in December 2014, as against 5,493 units in the corresponding month last year. HCIL also exported 620 units during the month. 

Modelwise domestic sales break-up of HCIL for December 2014 read: Brio – 1,120 units; Amaze – 5,146 units; Mobilio – 2,098 units; City – 6,012 units; and CR-V – 22 units.

Jnaneswar Sen, Sr VP – Mktg & Sales, HCIL, said, “Year 2014 has been a very successful year for HCIL business with record sales crossing 1.79 lakh units in the domestic market in a calendar year. Two successful launches of Honda City and Honda Mobilio coupled with strong demand for all models throughout the year have contributed to 67.0% growth in HCIL sales in 2014. Honda’s fast expanding dealer network in Tier III markets has further contributed to this sales growth.”

Toyota Kirloskar Motor (TKM) sold 11,740 units in December 2014 in the domestic market as compared to 10,648 units in December 2013, posting a growth of 10.3%. The company’s exports at 1,888 units during the month were down 4.4% y-o-y.  

“In continuation of the November upswing, we have registered growth in the domestic and overall sales in December as well. This momentum can be attributed to the year ending. Customers have appreciated our Remember December campaign. We thank our customers for their support and look forward to serving them with Toyota's quality services for years to come," said N Raja, Director and Sr Vice President, Sales & Marketing, TKM. 

Another Japanese car maker, viz. Nissan Motor India reported 32.6% growth y-o-y in domestic sales at 3,156 units in December 2014. The company’s exports plummeted 19.0% y-o-y to 11,748 units during the month.

The American auto majors, viz. Ford and General Motors remained in a deceleration mode.

Ford India posted a 36.1% decline in the domestic sales to 3,754 units in December 2014 from 5,871 units a year ago. The company’s exports at 10,647 units, however, stayed on course, increasing by whopping 99.5% y-o-y. 

General Motors India (GMI) saw its domestic sales slump by 45.0% y-o-y to 3,136 units in December 2014.

“Demand continues to remain subdued on account of high interest rates and weak economic fundamentals. The withdrawal of excise duty benefits is also a big jolt for the automobile industry,” said P Balendran, VP, GMI.

Passenger vehicle sales of Mahindra & Mahindra (M&M) in domestic market at 17,980 units in domestic market were flat in December 2014, inching up by measly 0.9% over 17,827 units in December 2013. Total sales of Mahindra’s passenger vehicles (domestic + exports) at 18,416 units during the month were, however, down 0.2% y-o-y. 

Tata Motors, another home-grown auto major, however, came up with a better show, riding on its new offering Zest. Domestic passenger vehicle sales of Tata Motors witnessed a 30.3% surge to 12,156 units in December’14 from 9,327 units a year earlier.

Commercial Vehicles

Recovering slowly from the prolonged slump, commercial vehicles sustained the growth momentum, clocking a 9.0% increase in domestic sales that aggregated 51,000 units in December 2014 vis-a-vis the corresponding sales figure of 46,785 units a year ago. Exports of commercial vehicles at 6,713 units also registered an impressive growth of 17.4% over 5,720 units in December 2013.

Ashok Leyland stayed on course and saw its CV domestic sales zoom 78.6% y-o-y to 5,926 units in December 2014.

The market leader, Tata Motors fared equally well notching up 62.4% growth in M&HCV sales in domestic market, which added up to 12,438 units during the month of December 2014. However, the company’s LCV sales in domestic market continued to encounter headwinds, falling sharply by 26.9% y-o-y to 13,325 units during the month.

Volvo Eicher Commercial Vehicles (VECVs) recorded 3,002 units of domestic sales in December 2014, up 26.6%.

Mahindra & Mahindra (M&M) also clocked a spectacular growth of 100.0% in domestic sales of its M&HCVs to 366 units in December 2014, albeit on a small base of 183 units a year ago. As in the case of other LCV majors, Mahindra’ reported negative growth of 9.5% y-o-y in domestic sales of LCVs, which fell to 12,002 units in December 2014 from 13,365 units in the same month previous year. 

Two-Wheelers

Two-wheeler segment remained on growth trajectory with a modest y-o-y growth of 4.3% in December 2014. Total two-wheeler sales volume in the Indian market aggregated 1,212,996 units in December 2014, as compared to corresponding sales figure of 1,163,573 units a year ago. 

Market leader Hero Motocorp saw domestic sales drop marginally by 1.6% to 506,632 units in December 2014 from 514,830 units in December 2013. The company’s exports growing by healthy 91.4% y-o-y to 19,447 units, however, made good the loss in domestic market.

Honda Motorcycle & Scooter India (HMSI), slowly catching up with its erstwhile partner Hero, once again came up with a robust performance. Domestic sales of HMSI grew by 16.7%  to 329,845 units in December 2014 from 282,684 units a year ago. The company’s exports at 18,758 units were higher by 38.3% y-o-y during the month.

Sustaining its growth momentum, TVS Motor Company sold 157,438 two-wheelers in domestic market during December 2014, which represented 18.7% increase over 132,664 two-wheelers sold in December last year. The company’s export of two-wheelers rose by 18.7% y-o-y to 24,556 units during the month.

India Yamaha Motor recorded a growth of 12.3% at 44,678 units in domestic sales during December 2014 over the corresponding sales tally of 39,777 units in December 2013.

Royal Enfield remained on a high-growth trajectory with a massive 47.8% y-o-y uptick in domestic sales, which stood at 28,179 units during the month of December 2014.

Suzuki Motorcycle India also posted a growth of 28.2% y-o-y in domestic sales at 24,011 units in December 2014, while its exports of two-wheelers soared by a massive 215.3% to 5,117 units during the month from 1,623 units in December 2013.

Domestic two-wheeler sales of Bajaj Auto continued to slide, falling by 21.0% to 106,919 units in December 2014 from 135,567 units a year back. The company’s two-wheeler exports at 139,314 units, however, remained buoyant, clocking a growth of 11.4% y-o-y. 

Mahindra Two-Wheelers stayed in negative terrain with its domestic sales plunging 32.6% y-o-y to 12,835 units in December 2014.

Though the auto market has been showing signs of recovering from the two-year long slump, the steep increase in prices from January largely as a result of the rollback of excise duty sops might put brakes on demand in the short-term. The heartening news is that CV sales are picking up gradually, inspiring hope.

 

 

 

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