Vehicle Sales Off to a Positive but Cautious Start in 2016

Auto market got off to a cautious start in the year 2016 with domestic sales across various segments, viz., passenger vehicles, 2-wheelers, 3-wheelers and commercial vehicles, rising by modest 3.0% y-o-y to 1,700,257 units in January 2016. The sales numbers are comforting inasmuch as all the segments were in positive territory, though the going was tough for all the segments except for commercial vehicles that clocked healthy growth of 17.5% in domestic sales during the month.

January 2016 witnesses subdued passenger vehicle sales

The January 2016 data indicated muted sales numbers for majority of the passenger vehicle players in India. Domestic sales of passenger vehicles at 232,016 units in January 2016 remained more or less flat, rising by just 0.6% vis-a-vis 230,618 units a year ago. After consistently posting growth for 14 months, car sales dipped by 0.7% y-o-y to 168,303 units. The domestic sales of utility vehicles and vans clocking 50,122 units and 13,591 units were up 3.4% and  7.5%, respectively. 

Maruti Suzuki India (MSI), the largest carmaker in the country, reported paltry growth of 0.8% in January 2016 with domestic sales of 106,383 units. The bread-and-butter entry level hatchback combine of the Alto and Wagon R sold 34,206 units in the domestic market, down 4.3% y-o-y. Domestic sales of its five compact cars (Swift, Ritz, Celerio, Baleno and Dzire) also registered negative growth of 2.8% y-o-y, adding up to 44,575 units during the month. The premium Ciaz too has been feeling the pressure of slowing sales. The car clocked 5,431 units in domestic sales, down 9.6% y-o-y. UV and van sales, however, saved the day for Maruti Suzuki in January. The Gypsy, Ertiga, Grand Vitara and S-Cross together sold 8,114 units, up 26.2% y-o-y and the Omni-Eeco combine posted growth of 3.9% y-o-y in domestic sales to 10,512 units. MSI’s exports were down 34.6% y-o-y to 7,223 units during the month. 

Hyundai Motor India Ltd (HMIL), the country’s No. 2 passenger car manufacturer, registered domestic sales of 38,016 units in January 2016, reflecting a 9.3% uptick year-on-year. However, HMIL’s exports, witnessing decelerating trends and standing at 6,214 units, were down 37.9%, as compared to the January 2015’s exports tally of 10,003 units.

Commenting on the January sales, Rakesh Srivastava, Senior Vice-President (Sales and Marketing), HMIL, said: “Hyundai has started the year on a positive note registering domestic sales of 38,016 units with a growth of 9.3% over last year. The growth momentum of last year has continued, built by the strong performance of products like the Grand i10, Creta and i20 Elite/Active.”

Mahindra & Mahindra (M&M) sold 22,088 units of passenger vehicles, including cars, utility vehicles and vans, in the Indian market during January 2016, as against 19,572 units during January 2015, which marked a growth of 12.9%.

Pravin Shah, President & Chief Executive (Automotive), M&M, said, “We are happy to have achieved this growth during January 2016 which has been possible due to the demand for our products especially the newly launched KUV100 and TUV300. The Auto Expo is expected to provide a strong fillip for the auto industry which would be beneficial for all OEMs. We are also hopeful that the upcoming Union Budget will have significant sops for the automotive industry, enabling it to post sustainable growth in times to come.”

Another home-grown player, Tata Motors, however, posted a 11.9% y-o-y decline in domestic sales of passenger vehicles, including cars, utility vehicles and vans, to 12,987 units in January 2016. The domestic sales of Tata passenger cars at 9,350 units were lower by 19.7% compared to 11,637 units in January 2015 and that of UVs declined by 2.7% y-o-y to 1,321 units in January 2016.  

Honda Cars India Ltd (HCIL) saw its domestic sales fall by 6.5% to 17,135 units in January 2016 from 18,331 units in January 2015. The popular City was the best-seller with 8,037 units, followed by the Jazz (4,709), Amaze (3,471), Mobilio (441), Brio (396) and the CR-V (81).

Volkswagen India recorded a 7.6% growth in domestic sales, which stood at 4,018 units in January 2016 as compared to 3,734 units sold in January 2015.

Toyota Kirloskar Motor (TKM) reported domestic sales of 8,511 units in January 2016, which represented a sharp 32.7% fall from the corresponding sales figure of 12,650 units in January 2015. On export front too, the January sales were little to cheer about for the Japanese carmaker – it shipped 745 units of the Etios series, compared to 1,714 units exported in January 2015.

“Our monthly sales have been affected partly by the recent ban on registration of diesel vehicles with engine capacity of more than 2000cc in Delhi and NCR. The Camry Hybrid, the first locally manufactured hybrid in India has sold over 1,500 units in the Indian market since its launch in August 2013,” N Raja, Director and Senior Vice President, Sales & Marketing, TKM, said.

Riding on Kwid, Renault India registered domestic sales of 8,031 units in January 2016 as against 3,203 units in January 2015, a phenomenal growth of 150.7%. 

Renault India says it has ramped up the production capacity at its Chennai plant to meet the growing demand for Kwid. It has substantially increased its sales and service network reach in India, from 14 sales and service facilities in mid-2011 to 205 currently, and is targeting to reach 240 facilities by the end of this year. 

Two-wheelers continue to face rural woes

Two-wheeler sales, the motorcycle sales in particular, continued to be sluggish with challenging environment facing rural economy due to vagaries of rains in the last two years. Though domestic sales of two-wheelers at 1,362,881 units in January 2016 recorded 2.6% growth y-o-y, motorcycle sales were flat, growing by measly 0.4% to 872,325 units.

Hero MotoCorp, the world’s largest two-wheeler maker witnessed flat sales in domestic market, which inched up by just 0.1% from 546,169 units in January 2015. The company is among those feeling the pressure of slowing commuter bike sales due to sluggish rural sector. Hero MotoCorp’s scooter range, led by the new Maestro Edge and Duet, helped sales stay positive by a wafer-thin margin.

Honda Motorcycle & Scooter India (HMSI) reported negative growth of 4.2% in its domestic two-wheeler sales at 361,739 units in January 2016 (January 2015: 377,502 units). The company’s scooter sales in the Indian market stood at 235,967 units – up 3.3% y-o-y. On the other hand, the domestic sales of its motorcycles fell steeply by 15.6% y-o-y to 125,772 units during the month.

With a tally of 172,135 units in January 2016, TVS Motor Company recorded 6.1% growth in domestic two-wheeler sales, as against 162,284 units in January 2015. The company’s two-wheeler exports numbering 29,071 units soared by whopping 51.2% y-o-y.

Bajaj Auto, which revealed its all-new 150cc V commuter motorcycle on February 1, sold a total of 252,988 motorcycles (including exports) to post 2.4% growth (January 2015: 246,955 units). While the domestic two-wheeler sales rose 9.2% y-o-y to 140,853 units, the company’s two-wheeler exports at 112,135 units were down 5.0% y-o-y during the month.

Driving in fast lane, Royal Enfield registered its highest-ever monthly sales in January 2016. The Chennai-based motorcycle manufacturer recorded domestic sales of 47,140 units in January 2016, clocking a substantial 67.4% jump over 28,157 units sold in January 2015. The company had registered its previous best in October 2015, a festive month last year, when it had sold 44,138 units in the domestic territory.

India Yamaha Motors sold 58,743 units in domestic market during January 2016, which represented a massive 49.4% increase vis-à-vis 39,313 units in January 2015.

CV sales maintain growth momentum

Domestic sales in the first month of 2016 stayed positive across both M&HCVs and LCVs. While M&HCV sales in domestic market remained in top gear, surging by 33.6% y-o-y to 28,533 units, the LCVs stayed on course to record 6.5% uptick in domestic sales at 33,150 units in January 2016. 

Tata Motors posted domestic sales of 30,727 units in January 2016, up 19.9% (January 2015: 25,627 units). Its M&HCV sales in the Indian market at 14,693 units were higher by 30.3% y-o-y. Holding onto the momentum of December 2015, Tata’s domestic LCV sales remained positive, growing by 11.7% to 16,034 units in January 2016, compared to 14,354 units in January 2015

Ashok Leyland was once again the star performer among the CV players in India. The company’s domestic CV sales at 10,131 units in January 2015 clocked a robust 45.4% growth over 6,967 units a year ago.

Mahindra & Mahindra’s M&HCV sales in the local market, reading 674 units in January 2016 were up 46.8% (January 2015: 459 units). Domestic sales of Mahindra LCVs notched up a 9.8% uptick, with sales volume of 13,711 units in January 2016 vis-à-vis 12,487 units in January 2015.

Boosted by Eicher Pro Series, VE Commercial Vehicles registered growth of 17.6% growth selling 3,415 units in the domestic market (January 2015: 2,905 units). 

The good news is that both M&HCVs & LCVs have started the year 2016 on a positive note. The LCV segment is seeing growth after nearly two years of sluggish phase. To cap it all, diesel prices and interest rates remain benign, which augurs well for the CV market for the rest of the year.

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