Auto Market Remains Subdued

The passenger vehicle and M&HCV sales were the bright spots in an otherwise unenthusiastic scenario in July 2015. The uncertainty, by and large, continued to haunt the auto market, with other segments posting negative or lukewarm growth numbers during the month. Total domestic sales across various vehicle categories at 1,619,771 units were virtually flat, inching up by just 1.4% y-o-y.

Passenger vehicles clock decent growth on the back of new launches

Driven by the new offerings and thanks to the aggresive discounting, passenger vehicle sales in the Indian market grew by a decent 11.4% to 222,368 units in July 2015 from 199,562 units a year ago. Passenger vehicle exports were also on course, up 8.5% y-o-y at 60,216 units. Total passenger vehicle sales tally of 282,584 units in July 2015 represented a 10.8% uptick year-on-year.

Leading the charge, market leader Maruti Suzuki India (MSIL) came up with an impressive showing, witnessing a growth of 22.5% in domestic sales of passenger vehicles, including cars, UVs and vans, which stood at 110,405 units in July 2015 vis-a-vis 90,093 units in July last year. The mini segment comprising Alto and WagonR notched up a handsome 31.3% increase with a domestic sales volume of 37,752 units during the month. The company’s exports at 11,307 units in July were flat, as compared to 11,287 units a year ago.

The second largest player in the Indian passenger vehicle market, Hyundai Motor India (HMIL) was also in the fast lane. Mustering 36,503 units in domestic sales in July 2015, HMIL posted a healthy 24.7% growth over the corresponding sales figure of 29,275 units during the same month last year. The company’s exports, however, remained in reverse gear, falling steeply by 25.8% y-o-y to 13,908 units during the month. Total sales, including domestic and exports, at 50,411 units were up 5.0% y-o-y.

Commenting on the July sales, Rakesh Srivastava, Sr VP - Sales and Marketing, HMIL said," Hyundai's new age product portfolio led by the newly launched Global SUV CRETA sustained the momentum, helping 24.7% growth with a volume of 36,500 units. The tremendous response for the Global SUV CRETA, i20 Active & Elite i20 showcases the customers’ increasing preference & early adoption for game changer products offering novelty value in style, first in segment features & strong after sale assurances."

Honda Cars India Ltd (HCIL), one of the few car majors to have bucked the trend, registered domestic sales of 18,606 units in July 2015 as against 15,709 units in the corresponding month last year, witnessing a growth of 18.4%. The new model of Jazz, launched recently, contributed substantial 6,676 units to boost HCIL’s sales tally. HCIL also exported a total of 614 units during July 2015. 

Model wise domestic sales break-up of HCIL for July 2015 read as follows: Brio - 1,122 units; Jazz - 6,676 units; Amaze - 4,589 units; City - 5,180 units; Mobilio - 909 units; and CR-V - 130 units. 

Jnaneswar Sen, Sr Vice President – Marketing & Sales, HCIL, said, “We are extremely delighted to receive a great consumer response for all new Jazz. We are confident that we will continue to do well in respective segments.”  

Toyota Kirloskar Motor (TKM)’s domestic sales at 12,070 units in July 2015 were more or less stagnant, increasing marginally by 1.2% y-o-y. The exports declining by 15.4% y-o-y to 1,629 units, pulled down total sales volume of TKM during the month by 1.1% to 13,699 units from 13,847 units a year ago.

N Raja, Director and Sr Vice President, Sales & Marketing, TKM, said, "We sold 12,070 units in the domestic market in July. Etios has been appreciated by the customers as one of the most dependable cars in its segment. Sales of Etios series grew by 16% in January-July 2015. Fortuner, the first choice in its segment, grew faster than the segment, bears testimony to the good response it received in the first half of the year."

The homegrown Tata Motors registered a 13.4% growth in passenger vehicle sales in domestic market, with sales count reading 10,335 units in July 2015 vis-a-vis 9,117 units a year back. The growth was propelled by Zest, Bolt and GenX Nano. While domestic sales of Tata passenger cars at 8,520 units were higher by 26.2%, that of UVs slid by 23.3% y-o-y to 1,815 units during the month.

Mahindra & Mahindra (M&M), another Indian player, was stuck in negative terrain, posting a negative growth of 8.2% y-o-y in passenger vehicle sales in the domestic market, which added up to 13,505 units in July 2015 as against 14,708 units in July 2014.

“While the auto industry is currently seeing muted growth, we do believe that the launch of some exciting new products will help it turn the tide. In addition, with the advent of a good monsoon till date and reduction in fuel prices, we expect sentiments to improve, leading to overall growth in auto sales. At Mahindra we continue to be excited with our portfolio of products as well as our upcoming launches. We are happy to have seen continuous growth in our HCV and exports numbers,” commented Pravin Shah, President & Chief Executive (Automotive), M&M.

Nissan Motor India saw its passenger vehicle sales in domestic market fall by 2.5% y-o-y to 2,841 units in July.

Volkswagen India, on the other hand, clocked 18.2% uptick with a domestic sales figure of 4,029 units in July 2015 vis-a-vis 3,409 units a year ago.

M&HCVs grow on replacement demand, while LCVs stuck in negative terrain

The sales pattern of commercial vehicles in July mirrored the trend witnessed in the last 9-10 months. M&CHVs recorded a healthy growth of 29.5%, thanks to the pent-up demand and the operators renewing their fleet, which had been kept on hold for over two years due to the challenging economic environment. LCVs, on the other hand, remained in a deceleration mode, reflecting that the economic activity is yet to gather pace.

The CV market leader, Tata Motors notched up a healthy growth of 21.4% in M&HCV sales in domestic market, which stood at 11,808 units during July 2015, as against 9,725 units in July last year. However, domestic sales of Tata LCVs at 12,933 units were down 21.4% y-o-y in July.

Ashok Leyland, the pick of CV players and making rapid strides, stayed on course. The company sold 10,237 CVs in July 2015 in the Indian market, growing by whopping 48.7% over the domestic CV sales volume of 6,883 units a year ago. Clocking a spectacular 65.0% surge, Ashok Leyland expanded its domestic sales tally of M&HCVs from 4,912 units a year ago to 8,105 units in July.

Volvo Eicher Commercial Vehicles (VECV) sold 3,050 Eicher trucks and buses in domestic market in July 2015 (YTD 23,470), as compared to 2,955 units (LYTD 20,976) in July 2014, posting a growth of 3.2% (YTD Growth of 11.9%). The exports at 602 units increased by 56.0% over 386 units in July 2014.

Growing by 7.2% y-o-y, Mahindra & Mahindra (M&M) witnessed domestic sales of 12,148 CVs (including LCVs and M&HCVs) in July 2015.

Two-Wheeler sales subdued by weak rural sentiment

Two-wheeler sales in the Indian market were stagnant, creeping up by measly 0.1% due to uncertainty in rural economy brought about by the drought-like conditions last year and irregular, unseasonal rains in the early part of this year. 

Hero MotoCorp Ltd (HMCL), the market leader, saw its domestic two-wheeler sales decline by 10.0% to 465,101 units in July 2015 from 516,661 units a year ago. The company, however, claimed that the retail sales were doing well. On the other hand, HMCL’s exports aggregating 22,479 units soared by 70.3% y-o-y during the month.

Honda Motorcycle & Scooter India (HMSI) encountered headwinds, with HMSI’s domestic sales recording moderate growth of 2.0% y-o-y to 371,349 units in July.

TVS Motor witnessed tepid sales numbers, domestic sales of its two-wheelers dipping by 1.0% y-o-y to 174,099 units in July 2015. The company’s two-wheeler exports, however, clocked a decent 14.8% upswing at 33,945 units during the month.

Bolstered by the new launches, Bajaj Auto posted 14.9% rise in domestic sales of two-wheelers to 143,671 units in July 2015 from 125,053 units a year earlier.

India Yamaha Motor turned in a decent performance, registering year-on-year growth of 16.3% in domestic sales at 58,477 units in July 2015.

The auto retail market is still gripped by the uncertainty. While there are straws in the wind, the firm recovery is likely to take some more time. The good news for the market is that the coverage and quantum of monsoon has been fairly good, improving sentiment and rekindling hopes of early revival.

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