Vehicle Sales Remain Sticky at Retail Level

Auto market got off to a cautious start during the FY 2015-16. While the passenger vehicles & M&HCVs maintained the growth momentum, other segments, viz., LCVs, two-wheelers and three-wheelers reported negative sales figures in April 2015. Total domestic sales across various vehicle categories registered unflattering growth of just 1.9%.

Passenger Vehicles Indicate a Semblance of Recovery

Passenger vehicle sales in the Indian market at 217,949 units in April grew by a decent 15.8% y-o-y. An 18.1% increase in domestic car sales that stood at 159,548 units came as a refreshing change. The 15.8% jump in passenger vehicle sales is the highest in the last 30 months. On a sequential basis, however, sales dropped 10.8% from 244,395 units sold in March 2015, resulting in huge inventory build-up at the dealerships. The growth in passenger vehicle sales during April 2015 was helped by freebies & discounts offered by the market, improved sentiment and stable interest rates, as also the low base of April 2014 when the PV sales had slid 9.5% y-o-y to 188,541 units.

Market leader - Maruti Suzuki India led the charge, selling 100,709 units in domestic market in April 2015. This translated into a healthy 27.3% rise over the domestic sales tally of 79,119 units a year ago. The company’s exports were also in fast lane surging by 56.0% y-o-y to 11,039 units during the month. 

Hyundai Motor India Ltd (HMIL) registered domestic sales of 38,601 units in April 2015, up 9.5% over the corresponding sales figure of 35,248 units in April 2014. The exports, on the other hand, at 12,904 units in April 2015 continued to go downhill, registering a negative growth of 13.8% vis-à-vis 14,974 units in April last year. Commenting on the April sales, Rakesh Srivastava, Sr VP - Sales and Marketing, HMIL, said, “Hyundai with a volume of 38,601 units continued the growth momentum with 9.5% increase over last year on the strength of strong and young product portfolio led by 12,425 units of the Elite i20 and i20 Active in a challenging market conditions especially in the rural market.”

Staying on course, Honda Cars India Ltd (HCIL) reported 14.5% rise in domestic sales at 12,636 units in April 2015, as against 11,040 units a year earlier. HCIL also exported 853 cars during the month.

Another Japanese carmaker - Toyota Kirloskar Motor (TKM) - has been on a double-digit growth spree since the beginning of the year 2015. Overall, TKM has posted 36.0% growth in the domestic market from January to April in 2015 when compared to the same period in 2014. 

The company registered domestic sales of 12,325 units in April 2015, 63% more than the 7,562 cars it sold in April 2014.  TKM also posted a handsome 73.9% y-o-y growth in exports that stood at 1,334 units in April 2015. It was achieved on a small base of 767 units in April last year, though. 

“The growth in sales can be attributed to the growing popularity of our Etios series, especially after the introduction of the Etios Cross last year. The Etios series along with the new Corolla Altis has helped us achieve a consistent growth month on month," N Raja, Director & Sr VP-Sales and Marketing, TKM, said.

Continuing strong demand for its new offerings – Zest and Bolt –helped Tata Motors sustain the growth momentum in passenger vehicle sales. The company sold 10,167 passenger vehicles in domestic market during April 2015, clocking a healthy growth of 38.3% over 7,353 passenger vehicles sold in April 2014. While passenger car sales in April 2015 at 8,925 units were higher by 57.9% (April 2014: 5,653 units), UV sales declined by 26.9% y-o-y to 1,242 units in April 2015.

Mahindra & Mahindra (M&M)’s Passenger Vehicles Division, which includes UVs and the Verito, sold 18,314 units in April 2015 as against 18,148 units during April 2014, recording flat growth of 0.9%. Pravin Shah, President & Chief Executive, Automotive, M&M said, “We are happy to have achieved an overall growth during April 2015. The auto industry is hopeful of a better financial year as we see positive sentiments on the back of various policy and project announcements leading to higher levels of economic activity. At Mahindra, we expect to perform better given the positive sentiments and the upcoming launches of our new products.”

General Motors India (GMI) continued to head southwards, posting negative growth of 35.4% in domestic sales, which added up to 3,423 units in April 2015, compared to 5,302 units a year ago.

Ford India’s domestic sales of 4,931 units in April 2015 marked a sharp 25.9% decline from the domestic sales volume of 6,651 units in April 2014. However, company witnessed a whopping 39.7% y-o-y surge in exports that numbered 9,284 units in April 2015. As a result, Ford India ended up with a 6.9% growth in total sales that aggregated 14,215 units during the month (April 2014: 13,297 units).

Volkswagen India notched a 17.7% increase in domestic sales during April 2015 that saw 3,572 units being sold compared to 3,033 units in the same month last year. The company’s exports too soared by 38.4% y-o-y to 8,068 units during the month. 

Two-wheeler Sales Skid in April on Rural Slide

Two-wheeler sales have hit the bump since the second half of FY’15 due largely to the deficient, uneven monsoon rains last year, adversely impacting the rural incomes. The unseasonal rains in March and April this year have added to the woes of two-wheeler market. The month of April saw two-wheeler sales in the Indian market slip marginally by 0.2% to 1,287,064 units from 1,289,183 units a year ago.

Two-wheeler major Hero MotoCorp reported domestic sales of 525,051 units in April, a 6.0% decrease compared to 558,556 units sold in the same month a year ago. The April sales performance marked the third decline for the company in four months of the year.

The rising star in the Indian two-wheeler market, Honda Motorcycle & Scooter India (HMSI) is losing steam after a stellar performance during the year gone by. HMSI managed to clock a year-on-year growth of 8.9% in domestic sales that added up to 328,994 units in April 2015. The growth came about on the back of continuing robust scooter sales that grew by 15.9% y-o-y, while the company’s motorcycle sales in domestic market were static, witnessing a 0.1% drop. 

Bajaj Auto remained in reverse gear, posting a negative growth of 3.8% in domestic sales that stood at 160,554 units in April 2015 vis-à-vis domestic sales volume of 166,874 units a year back.

TVS Motor Company stayed on the growth path. The company clocked 13.3% growth with its domestic two-wheeler sales count of 162,516 units in April 2015 vis-à-vis 143,434 units in April 2014.  The company’s two-wheeler exports too were on course, increasing from 21,760 units in April 2014 to 23,525 units in April 2015.

Niche two-wheeler player, Royal Enfield continued its dream run. The company clocked domestic sales of 33,118 units in April 2015, which represented a hefty 42.9% growth over 23,180 units a year ago. 

India Yamaha Motor, Suzuki Motorcycle India and Mahindra Two-Wheelers were in negative terrain, registering year-on-year negative growth of 24.5%, 8.9% and 22.8%, respectively, in domestic sales.

Sales Numbers of M&HCVs Augur Well for the Rest of the Year

Commercial Vehicle sales in April 2015 fell into the familiar pattern of the last one year. Domestic sales of M&HCV at 19,277 units recorded a 24.9% uptick in April 2015. LCVs were stuck in the rut with domestic sales falling by 3.8% y-o-y to 26,595 units during the month.  

Tata Motors Commercial Vehicle sales in domestic market clocked 22,192 units during April 2015 – down 4.8% y-o-y. While domestic sales of Tata M&HCVs at 10,179 units were up 20.8%, the corresponding sales volume of LCVs shrunk by 19.3% y-o-y to 12,013 units during the month.

VE Commercial Vehicles sold 3,930 units in the local market in April 2015, recording 12.2% increase y-o-y.

Ashok Leyland maintained the growth momentum, notching up an impressive y-o-y growth of 44.0% in domestic sales to 7,389 units during the month. 

With inventories swelling at the dealerships, the situation at the retail level remains challenging. The forecast of somewhat deficient monsoon rains this year has given rise to further cause of concern.

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