Buoyancy Continues to Elude Auto Market

Vehicle sales in the Indian market remained unenthusiastic during the month of February 2015 despite the consumer sentiment getting better gradually and relatively lower interest rates. The slowdown in two-wheeler demand in rural market due to the adverse impact of erratic rains on the crops and cutback in the funds under MNREGA took its toll on the overall sales numbers.  Two-wheelers and Three-wheeler sales were on a sticky wicket. Total domestic sales at 1,526,125 units across various vehicle categories in February 2015 were more or less flat, growing by just under 0.2% y-o-y.

Passenger Vehicles 

Riding on the improved sentiment, passenger vehicle sales in domestic market grew by a modest 6.2% to 231,165 units in February 2015 from 217,750 units a year ago. Owing to the persistent challenging economic environment in Europe and other parts of the world, barring USA, passenger vehicle exports were in negative terrain, falling by 2.8% y-o-y to 47,011 units during the month. 

Car market leader, Maruti Suzuki India (MSI), set the pace of passenger vehicle sales growth, reporting total sales (domestic and exports) of 118,551 units in February 2015 - up 8.7%  over the corresponding sales tally of 109,104 units in February last year. While the domestic sales of MSI at 107,892 units grew by 8.2% y-o-y, the exports clocked 14.0% increase y-o-y to 10,659 units during the month.

The company’s entry level cars – Alto and Wagon R – sold a total of 39,988 units in domestic market during February 2015, which represented a growth of 7.1% over 37,342 units in February 2014. The premium compact cars – Swift, Ritz, Celerio and DZire – contributed 42,778 units in domestic sales, registering a 6.4% drop y-o-y.  Ciaz in mid-size segment, UVs (Ertiga, Gypsy and Grand Vitara) and Vans (Eeco and Omni) did reasonably well notching up 5,410, 5,863 and 11,301 units, respectively, in domestic sales during the month. On the export front, MSI shipped 10,659 units in February 2015, which translated into a decent growth of 14.0% growth vis-a-vis 9,346 units in February 2014.

Hyundai Motor India Ltd (HMIL), the second largest carmaker in India, registered domestic sales of 37,305 units in February 2015 - a growth of 9.7% (February’14: 34,005 units). However, the company’s exports continued to slide, witnessing a 17.5% drop in February 2015 with shipment of 10,307 units (February 2014: 12,500 units). Rakesh Srivastava, Sr VP - Sales and Marketing, HMIL said, “The growth in additional & repeat buyers is higher than that of first time buyers. Reduction in interest rates could bring in the necessary thrust to the double digit growth."

For Honda Cars India Ltd (HCIL), the Amaze and City sedans continued to enjoy robust demand to power the company’s domestic sales to 16,902 units in February 2015, which represented an impressive 16.0% rise year-on-year.  Amaze and the new City made handsome contributions, selling 7,163 and 6,505 units, respectively during the month. The Brio hatchback clocked domestic sales volume of 1,397 units; CR-V, 140 units; and the Mobilio, 1,697 units, during the month. HCIL also exported 1,119 units in February 2015. 

Nissan Motor India witnessed a stupendous growth of 185.5% y-o-y, albeit on a small base, in its domestic sales that stood at 1,713 units in February 2015. 

Ford India sold total of 12,576 vehicles in domestic and export markets in February 2015, a 2.6% increase over the corresponding sales figure of 12,253 vehicles a year ago.  The company’s domestic sales added up to 5,959 units, falling by 12.4% y-o-y, while exports grew by 21.3% y-o-y to 6,617 units during the month.

“We welcome the government’s clear focus on promoting infrastructure and investment as indicated in the Union Budget. This will have an indirect effect on the growth of the automotive sector, which is one of the biggest contributors to GDP,” said Anurag Mehrotra, Executive Director - Marketing, Sales & Service at Ford India.

Toyota Kirloskar Motor (TKM) saw its domestic sales go up by 16.9% to 11,802 units in February 2015 from 10,100 units in February 2014. TKM’s exports too were in high gear, rising by 24.4% y-o-y to 1,478 units during the month. 

On the back of continuing strong sales of Zest sedan and a good response to the new Bolt hatchback, Tata Motors posted 22.4% growth in domestic sales of passenger vehicles during February 2015 vis-a-vis 11,204 units sold in February 2014. While the sales of Tata passenger cars in February 2015 stood at 11,805 units - higher by 30.8% year-over-year, the UV sales declined by 15% y-o-y to 1,962 units.   

Passenger vehicle sales of Mahindra & Mahindra (M&M) (which includes UVs and the Verito) were in deceleration mode, with domestic sales figure reading 18,103 units in February 2015 compared to 19,310 units a year ago, which reflected a 6.3% drop. 

Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M said, “With an expected revision in lending rates in the RBI policy in early April, the industry should see better times ahead.”  

General Motors India (GMI) was stuck in reverse gear, posting a 32.1% decline in its local sales to 3,806 units in February 2015 from 5,607 units in February 2014.

Commercial Vehicles

Commercial vehicles, a barometer of the health of an economy, which had strayed off the course for 3 long years, continued to drive back to the growth path in February 2015. The domestic CV sales grew by 10.1% to 52,843 units from 47,982 units a year ago. 

Tata Motors’ commercial vehicles sold 26,547 units in the domestic market during the month of February 2015, growing by 11.0% y-o-y. LCV sales at 14,357 units, registered a 4.0% decline, while M&HCV sales continued to witness uptrend, surging by 34.0% y-o-y to 12,190 units during the month.

Ashok Leyland sustained the momentum, clocking a growth of 40.8% in CV sales in the Indian market to 9,615 units in February 2015 vis-à-vis 6,830 units in February 2014. The company’s exports at 1,122 units were also up by 7.8% y-o-y.

V E Commercial Vehicles recorded total sales of 3,100 units in February’15 as compared to 2,840 units in February’14, representing a growth of 9.2%. In the Indian market, Eicher trucks and buses recorded sales of 2,774 units as compared to 2,531 units in February 2014, registering a 9.6% uptick. 

Domestic CV sales of Mahindra & Mahindra (M&M), on the other hand, were down 14.1% y-o-y to 11,945 units during February 2015. However, M&M had the comfort of witnessing a 44.6% jump in the domestic sales of its M&HCV to 386 units in February 2015 from 267 units a year ago. 

Two-Wheelers 

The two-wheeler sales are struggling with the slowdown blues affecting the rural market. Domestic sales of two-wheelers at 1,208,084 units were down 1.0% y-o-y in February 2015. The two-wheeler exports too decelerated, witnessing a negative growth of 3.2% y-o-y during the month.

Market leader, Hero MotoCorp (HMCL) reported a 4.0% decline in its domestic sales to 475,251 units in February 2015 from 494,869 units in February 2014. 

Honda Motorcycle & Scooter India (HMSI) stayed in top gear, notching up a 10.9% increase in domestic sales to 347,806 units (313,519 units) during February 2015. The company’s exports at 13,369 units were down by 10.6% y-o-y.

Another Japanese two-wheeler player - India Yamaha Motors posted a 10.6% fall in domestic sales to 37,982 units during February 2015, as against 42,489 units sold in February last year. 

Staying in negative terrain, Bajaj Auto’s domestic motorcycle sales plummeted by 25.8% to 115,840 units in February 2015 from 156,184 units a year ago. The two-wheeler exports of Bajaj Auto also hit a speed breaker, slipping by 14.4% y-o-y to 100,237 units. 

Meanwhile, TVS Motor Company continued to march ahead, with the company’s domestic two- wheeler sales increasing by 11.5% from 147,580 units a year ago to 164,508 units in February 2015. The two-wheeler exports of TVS were also in top gear, surging by 36.5% y-o-y to 31,001 units during the month.

Suzuki Motorcycle India registered a paltry 2.3% increase in domestic sales of its two-wheelers, which added up to 26,013 units in February 2015, compared to 25,425 units in February last year. In terms of export performance, the company sold 4,506 two-wheelers in overseas markets, which translated into a whopping 184.8% growth y-o-y.

Royal Enfield remained in fast lane, clocking a spectacular year-on-year growth of 48.6% and 48.9% in domestic sales and exports, respectively. While the domestic sales tally stood at 29,491 units, the exports numbered 749 units. 

Auto market is pinning its hopes on the early implementation of various proposals contained in the Union Budget aiming to stimulate economic growth. However, untimely rainfall affecting Rabi crops could act as a spoils sport

 

 

 

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