Vehicle Sales Continue to Face Rough Weather

Reflecting the none-too-enthusing mood prevailing in the auto market for long time, vehicle sales during the month of August remained tepid despite new offerings and low fuel prices. The sales performance of various segments of auto market during the month largely mirrored the pattern as witnessed in the past 7-8 months, with two-wheeler and LCV sales remaining sticky, passenger vehicles recording moderate uptick and M&HCVs seeing healthy growth on a low base.  Total domestic sales across various vehicle categories at 1,626,148 units in August 2015 dipped 2.1% y-o-y.

New launches keep passenger vehicle sales positive

Thanks to the new launches, passenger vehicle sales in the domestic market aggregating 222,476 units in August 2015 posted a 4.0% uptick vis-à-vis 213,938 units in August 2014. Passenger vehicle exports grew by 12.3% y-o-y to 59,568 units during the month.

Market leader Maruti Suzuki India (MSI) sold a total of 117,854 vehicles in August 2015, a growth of 6.4%. The company’s domestic sales tally of 106,781 units in August reflected an 8.6% increase (August 2014: 98,304 units); while exports at 11,083 units registered a negative growth of 11.2% y-o-y.

The combined domestic sales of Alto and WagonR at 37,665 units during the month of August 2015 represented a growth of 8.6% y-o-y.  The launch of S-Cross propelled the company’s UV segment to grow by whopping 42.7% y-o-y in August 2015 with a domestic sales tally of 7,836 units. On the other hand, Swift, Ritz, Celerio and DZire in compact segment saw a 11.3% slump in domestic sales that stood at 41,461 units vis-à-vis 46,759 units a year ago.

The second largest player in the Indian passenger vehicle market, Hyundai Motor India Ltd (HMIL) recorded highest-ever domestic sales of 40,505 units in August 2015, clocking 20.0% growth over 33,750 units sold during August 2014. However, the company’s exports continued to slide, slipping by 1.8% y-o-y to 14,102 units during the month.

Rakesh Srivastava, Sr VP - Sales & Mktg, HMIL said, "Hyundai recorded highest-ever single month  domestic sales, led by strong youthful product portfolio, in which the Global SUV CRETA & Elite i20 and i20 Active had volumes of more than 17,800 units."

Encountering a bump, Honda Cars India Ltd (HCIL) registered a 6.6% dip in domestic sales at 15,655 units in August 2015, as against 16,758 units in the corresponding month last year. The model-wise domestic sales break-up of HCIL for August 2015 read: Brio- 622 units; Jazz- 5,404 units; Amaze - 3,260 units; City- 5,405 units; Mobilio - 899 units; and CR-V- 65 units.

Toyota Kirloskar Motor (TKM) selling 11,161 units in the Indian market during August 2015 posted a 0.5% drop y-o-y. The company’s total sales, including exports, at 12,553 units, were up marginally by 1.3%. 

N Raja, Director & Sr VP, TKM said that the new Camry doubling its sales in the domestic market and the hybrid model constituting 80.0% of its sales, shows the wide acceptance of hybrid technology in India.

Domestic passenger vehicle sales volume of Tata Motors at 11,163 units in August 2015 increased by modest 2.1% from 10,932 units in August last year. The growth was driven by the company’s new offerings in passenger car segment. Domestic sales of passenger cars at 9,814 units in August 2015 were higher by 19.0%, compared to 8,249 units in August 2014, while the company’s UV sales in domestic market declined by 49.7% y-o-y to 1,349 units, in August 2015.   

Another homegrown player, Mahindra & Mahindra (M&M) remained on a sticky wicket, witnessing 7.3% fall in domestic sales of its passenger vehicles, which read 14,198 units in August 2015, vis-a-vis 15,321 units sold a year ago. M&M’s passenger vehicle exports at 614 units in August increased by 130.8%, albeit on a small base of 266 units last year. 

“While currently we are witnessing fragmented recovery in auto sales, we are hopeful that the upcoming festive season will provide a much needed fillip to the auto industry,” said Pravin Shah, President & Chief Executive (Automotive), M&M.

Nissan Motor India saw its domestic sales in August 2015 fall sharply by 29.8% to 2,809 units from the corresponding sales figure of 3,999 units a year earlier. The company’s exports at 10,685 units during the month grew by healthy 15.5% over 9,249 units in August last year.

Volkswagen India managed to maintain its sales growth momentum both in the domestic and international markets. In domestic market, the company clocked a 4.6% increase with sales of 4,191 units (August 2014: 4,007 units), while the exports at 7,108 units during the month witnessed a paltry 1.0% uptick y-o-y.  

Renewal of aging fleet boosts M&HCV sales

Thanks to the low base and the operators renewing their aging fleets after over two years of economic uncertainty, M&HCVs recorded a growth of 35.4% in domestic sales at 23,016 units in August 2015, against 17,000 units sold in the year gone by. LCVs, on the other hand, continued to head southward, their domestic sales falling 7.4% y-o-y to 29,182 units during August 2015.

The CV market leader, Tata Motors clocked 24,315 units in domestic CV sales during the month of August 2015, reflecting a 4.6% de-growth, compared to the corresponding sales figure of 25,491 units a year ago. While domestic sales of Tata M&HCVs continued to grow, the LCV sales remained in negative terrain, in keeping with the industry trends. M&HCV sales of the company in domestic market at 12,017 units were higher by an impressive 31.5% over August 2014 (9,141 units). The domestic sales of Tata LCVs, declined steeply by 24.8% y-o-y to 12,298 units during the month. 

Mahindra & Mahindra (M&M) notched up a growth of 14.5% in M&HCV domestic sales, which numbered 396 units in August 2015, as against 346 units sold in August 2014. The domestic sales of Mahindra LCVs sales grew by 4.8% to 12,627 units in August 2015 (August 2014: 12,050 units).

Ashok Leyland was again the pick of CV players in the Indian market, witnessing a robust 40.2% surge in domestic sales that added up to 10,255 units in August 2015 vis-à-vis 7,316 units in the same month last year. While M&HCVs, accounting for 7,883 units of domestic sales, were up 59.0% y-o-y, LCVs clocked 2,372 units, rising marginally by 0.6% y-o-y. .

Volvo Eicher Commercial Vehicles (VECV) sold 3,009 units of Eicher branded trucks and buses (5T and above) in domestic market during August 2015 (YTD 26,479), as compared to 2,571 units in August 2014 (LYTD 23,547), translating into a growth of 17.0% (YTD Growth of 12.5%). The exports of Eicher Trucks and Buses at 602 units in August 2015 (YTD 3,410) were up 32.0% over 456 units in August 2014 (LYTD 3,941).

Two-Wheeler sales remain subdued due to rural woes

Two-wheeler sales in the Indian market continued to confront headwinds. Weakening demand for motorcycles, particularly in rural market, dragged down the two-wheeler sales volume. Total domestic sales of two-wheeler at 1,305,350 units in August 2015 were down 3.0% vis-à-vis 1,345,506 units a year earlier. While scooter sales increased by 15.7% y-o-y to 427,165 units, the motorcycles posted a 9.6% fall in domestic sales that aggregated 823,053 units in August 2015. Domestic sales of Mopeds declined as well -  by 16.3% y-o-y to 55,132 units. Two-wheeler exports stayed on course, nonetheless, growing by 7.6% y-o-y to 233,551 units in August.

Hero MotoCorp Ltd (HMCL), the two-wheeler market leader, was stuck in the reverse gear, the company’s domestic sales of two-wheelers falling steeply by 14.0% to 460,557 units in August 2015 from 535,503 units during the same month last year. The company’s two-wheeler exports at 19,980 units also registered 13.5% downturn y-o-y.

Honda Motorcycle & Scooter India (HMSI) scraped through the slowdown blues and barely managed to stay positive. Domestic sales of Honda two-wheelers at 373,169 units in August 2015 remained virtually flat, inching up by just 0.6% over 370,871 units a year ago.

TVS Motor’s domestic sales tally of 183,653 units in August 2015 reflected a 2.6% decline year-on-year. The company’s two-wheeler exports were, however, in fast lane, zooming by 19.4% y-o-y to 32,378 units during the month.

Bajaj Auto posted a paltry 0.4% growth in domestic motorcycle sales at 137,948 units in August 2015 (August 2014: 137,347 units). The company exported 152,488 two-wheelers during the month, witnessing a 3.8% upswing y-o-y.

India Yamaha Motor clocked a 15.4% rise in domestic sales, which added up to 61,440 units in August 2015. 

Suzuki Motorcycle, Mahindra Two-Wheelers and Royal Enfield came up with decent sales performances, their domestic sales growing y-o-y by 52.9% (29,870 units), 28.4% (14,353 units) and 59.3% (41,600 units), respectively, in August 2015. 

Auto market continues to face challenging environment. However, with the pick-up in industrial activity and the easing of inflation & petroleum prices, vehicle sales are expected to gain traction in the second half of the current fiscal. 20% monsoon rainfall deficit in 8 States, however, remains a worry.

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