Rural Blues Bog Down Auto Market

Indian automotive market continued to encounter headwinds during the month of September 2015 that saw the total domestic sales fall marginally by 0.5% to 1,881,673 units vis-à-vis 1,890,218 units in the same month last year. Uncertainty over rural economy and faltering rural incomes as a result of erratic, deficient rains played the spoilsport yet again. 

New Models Propel Passenger Vehicle Sales

Domestic sales of passenger vehicles at 232,167 units in September 2015 registered a modest 3.8% uptick over 223,584 units in the year-ago month. The sales were propped up largely by new offerings in the market, i.e. Hyundai’s Creta, Honda’s new Jazz, Maruti Suzuki’s S Cross, TUV300, which contributed significant numbers. Passenger vehicle exports were, however, down 0.6% y-o-y to 57,421 units in September 2015. 

Maruti Suzuki India (MSIL), the largest carmaker in the country, saws its domestic sales grow 6.8% in September to 106,083 units from 99,290 units in September 2014. On the flipside, the company’s exports fell sharply by 26.6% y-o-y to 7,664 units during the month.

Hyundai Motor India (HMIL), the second largest car player in the Indian market, recorded highest-ever domestic sales of 42,505 units and exports of 14,030 units. While the domestic sales surged 21.3%, the exports were down 14.6% year-on-year. Total sales at 56,535 units (including domestic sales and exports) during the month of September 2015 translated into a growth of 9.8% over 51,471 units in September 2015.

Commenting on the September sales, Rakesh Srivastava, Sr VP - Sales & Mktg, HMIL said, "Hyundai grew by 21.3% with its highest-ever monthly domestic sales of 42,505 units in a single month in its last 17 years on the strong performance of its modern premium brands – CRETA, Elite i20, i20 Active and Grand, while also registering 14.2% growth in the first-half of this fiscal year."

Honda Cars India Ltd (HCIL) bounced back from the unimpressive performance in the previous month, with a bang, clocking a healthy growth of 23.3% with domestic sales of 18,509 units in September 2015 (September 2014: 15,015). Surprisingly, Honda Amaze pipped both City and the Jazz to become the company’s most sold car in India with sales of 6,577 units. Meanwhile, the City sold 5,702 units, while the new Jazz netted 4,762 units of domestic sales. The domestic sales break-up for the company’s other cars was: Brio - 759 units, Mobilio - 643 units, and CR-V - 66 units.

HCIL also exported a total of 782 cars during September 2015. For the first half of the fiscal (April-September 2015), the carmaker has registered  total sales of 97,217 units in domestic market, as against 88,200 units for the corresponding period last year, marking a growth of 10%.

Home-grown Mahindra & Mahindra (M&M) reported a 7.5% decline in passenger vehicle sales in the Indian market to 19,564 units during September 2015 from 21,141 units sold in the same month a year ago, as rising competition continued to weigh on the company.

Pravin Shah, President and Chief Executive (Automotive), M&M, said, “While the auto industry witnessed a slow and fragmented recovery, the recent interest rate reduction by the RBI is bound to infuse optimism, especially during the upcoming festival season.”

Another home-grown player, Tata Motors was also in the negative terrain, the company’s domestic sales of passenger vehicles dipping by 1.2% to 11,732 units in September 2015 from 11,869 units a year ago. While domestic sales of Tata passenger cars at 10,226 units were higher by 4.7%, that of UVs declined by 28.4% y-o-y to 1,506 units during the month.

Meanwhile, Ford India sold 22,428 vehicles in combined domestic market and exports in September 2015, compared to 13,742 vehicles in the corresponding month last year. The September domestic sales stood at 8,274 vehicles as against 6,786 vehicles a year ago, while exports stood at 14,154 vehicles vis-a-vis 6,956 vehicles in September 2014.

“With the launch of all-new Figo, we are stepping closer to our promise of launching 3 brand new products for Indian consumers by first quarter of 2016. Backed by a strong growth vision and great products like the new Figo and Aspire, we look forward to welcome many more customers to the Ford family this festive season,” said Anurag Mehrotra, ED, Marketing, Sales & Service, Ford India. 

Toyota Kirloskar Motor (TKM) sold 11,376 units in the domestic market and exported 1,252 units of Etios in September 2015, compared to 12,552 units sold in the domestic market and 1,500 units of Etios exported in September 2014.

N Raja, Director and Sr VP, Sales & Mktg, TKM said: "We are hopeful that the recent repo rate cut and the approaching festive season, will soon see a boost in sales in the upcoming months.”

M&HCV sales rise on low base and replacement demand, while LCVs remain off-track

M&HCV sales stayed on course, riding on low base and renewal of aging fleet. The sales were also driven by pick-up in industrial & mining activities. On the other hand, LCVs were stuck in negative terrain, suggesting that a broad-based firm recovery is still eluding the economy. While the domestic sales of M&HCVs grew by a healthy 63.8% to 31,172 units in September 2015, that of LCVs slid by 14.5% y-o-y to 31,673 units during the month.

It was a mixed bag for the CV market leader – Tata Motors that witnessed an impressive 53.0% jump in domestic sales of its M&HCVs, which increased from 10,404 units in September last year to 15,915 units in September 2015. On the downside, Tata LCVs continued in a deceleration mode, posting a steep 29.2% y-o-y fall in domestic sales at 13,166 units during the month.

Ashok Leyland was yet again the pick of CV players in the Indian market. The company has been clocking robust growth month after month for the last one year. Its total domestic sales at 13,890 units were up by a massive 72.4% (September 2014: 8,058). The company’s M&HCVs, with a domestic sales tally of 11,481 units notched up a whopping 105.0% growth in September 2015 (September 2014: 5,600). Domestic sales of Ashok Leyland LCVs were, however, flat, declining a tad by 0.7% y-o-y to 2,409 during the month.

Mahindra M&HCV sales in domestic market rose 180.9%, albeit on a low base, to 545 units (September 2014: 194). In LCV segment, M&M registered a 7.3% de-growth, clocking a domestic sales volume of 13,885 units in September 2014, vis-à-vis 14,977 units a year ago.

VE Commercial Vehicles (VECV) maintained its double-digit growth in September 2015. The company having sold 3,452 units in the local market, registered a growth of 24.1% over 2,781 units in September 2014.

Two-Wheelers hit by sluggish rural market

Two-Wheeler sales remained bearish, weighed down by the slowing rural market. Domestic two-wheeler sales at 1,537,137 units in September 2015 were down 1.1%, compared with 1,553,608 units a year ago.

Hero MotoCorp (HMCL) reported a paltry 1.5% increase in domestic sales at 589,644 units in September 2015 (September 2014: 580,882). Total sales, including domestic & exports, adding up to 606,744 units were virtually flat, inching up by just 0.4% over 604,052 units in September last year. The company has crossed 6.0 lakh+ unit milestone on three previous occasions - October 2013 (625,420), May 2014 (602,481) and September 2014 (604,052). "Hero MotoCorp has consolidated its share in the domestic motorcycle market to 52 per cent and in the 125cc segment to around 50 per cent," the company’s release stated.

Honda Motorcycle & Scooter India (HMSI) totted up 411,645 units in domestic sales in September 2015, which reflected a 2.1% decline vis-a-vis 420,600 units in September 2014. HMSI’s exports, however, grew by 6.6% y-o-y to 19,089 units during the month.

India Yamaha Motors posted a 13.4% increase in domestic sales in September 2015 at 67,267 units, as against 59,325 units sold in the same month last year. The exports were also on high-growth curve, increasing by a healthy 26.4% y-o-y to 15,612 units in September.

Royal Enfield recorded another month of strong sales performance, selling 43,741 two-wheelers in domestic market, which represented a whopping 58.8% upswing y-o-y.

TVS Motor witnessed a 6.9% drop in domestic two-wheeler sales, which stood at 190,094 units in September 2015, as against 203,755 units in September last year. On the upside, the company’s two-wheeler exports soared 29.7% y-o-y to 30,908 units during the month.

Bajaj Auto saw its domestic two-wheeler sales decline by 5.8% y-o-y to 187,711 units in September 2015. The company’s exports at 142,517 units were also lower by 3.5% y-o-y.

Auto market is expecting to gather pace in the second half of the year, helped by lower fuel prices, soft interest rates, benign inflation and gradual pick-up in the economy.

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