Vehicle Sales Stay on Track in February 2016

However, auto market wary of the budget blues ahead

Auto market remained on growth curve in February 2016, thanks to the new models’ buzz. The good news is that two-wheelers were back in acceleration mode after tepid performance during the previous few months. Total vehicle sales in the Indian market across various segments at 1,703,688 units grew by a decent 11.8% y-o-y. Total exports were more or less flat creeping up by just 0.9% to 255,076 units in February 2016 from 252,738 units a year ago.

New Models Shore Up Passenger Vehicle Sales Volumes

With latest offerings from OEMs remaining hot pick among the potential Indian car buyers, domestic passenger vehicle sales at 234,154 units managed to register a measly growth of 1.7% y-o-y in February 2016. Within the passenger vehicle segment, car sales declined for a second straight month, posting 4.2% dip in February, as the Jat quota stir in northern region, coupled with the temporary ban on larger diesel cars and SUVs in NCR till 31st March 2016, affected the demand. Domestic passenger car sales stood at 164,469 units in February as against 171,703 units in the same month last year.

Maruti Suzuki India (MSI), the country’s largest carmaker, sold 108,115 units in the domestic market during February 2016, which represents only 0.2% growth over 107,892 units in February 2015. MSI’s exports were also down 12.4% y-o-y to 9,336 units during the month. February 2016 saw the company’s production at the Gurgaon and Manesar plants being hit by the reservation agitation, causing a temporary suspension of production. The company put the total production loss at over 10,000 units due to the agitation that also caused extensive Statewide damage and affected sales. 

Robust sales of its utility vehicles and vans spared MSI of the blushes. While UVs (Gypsy, Ertiga, S-Cross) sold 8,484 units in the Indian market during February 2016 to notch up 44.7% growth (February 2015: 5,863 units), the domestic sales of vans comprising Omni and Eeco at 12,482 units recorded a 10.5% uptick y-o-y. The company’s entry level siblings, viz. Alto and Wagon R hatchbacks witnessed domestic sales of 35,495 units, down 11.2% y-o-y. The compact car quintet of the Swift, Ritz, Dzire, Celerio and Baleno sold 42,970 units in domestic market during the month crawling up by just 0.4% vis-à-vis the corresponding sales figure of 42,778 units a year ago.

Second largest carmaker in India, Hyundai Motor India Ltd (HMIL) registered domestic sales of 40,716 units in February 2016 (February 2015: 37,305 units), clocking a 9.1% growth. Commenting on the February sales, Rakesh Srivastava, Senior VP (Sales & Mktg), HMIL, said, “Hyundai’s domestic sales grew by 9.1% on the strength of strong performance of the Creta, Elite i20 and Grand despite logistic challenges of transportation of vehicles to North India and loss of many business days of dealership operations across Haryana.”

Mahindra & Mahindra (M&M) maintained the growth momentum, with the company’s domestic sales of passenger vehicles, comprising UVs, cars and vans zooming 26.0% to 23,718 units in February 2016 from 18,817 units in the same month last year.

Buoyant demand for Mahindra’s new models like the TUV300 and KUV100 helped give a fillip to the company’s overall sales, even as the old warhorses Scorpio and Bolero continue to provide the buffer with consistent demand. 

On the other hand, another homegrown player – Tata Motors saw domestic sales of its passenger vehicles fall by 10.9% to 13,135 units in February 2016 from the corresponding sales tally of 14,749 units a year earlier.

Honda Cars India Ltd (HCIL) posted a sharp 23.0% decline in its domestic sales that stood at 13,020 units in February 2016 (February 2015:16,902 units). The company’s best-seller for the month was the popular City sedan with 4,880 units, followed by the Amaze (4,069 units), Jazz (3,365 units), Brio (399 units), Mobilio (226 units), and the CR-V (81 units).

Another Japanese carmaker, Toyota Kirloskar Motor (TKM) sold 10,312 units in the local market during February 2016, which marked a 12.6% decline vis-à-vis 11,802 units in February 2015. 

“Our monthly sales for February have picked up when compared to January 2016. However, the ban on registration of diesel vehicles in Delhi and NCR still continues to affect our sales, as the Delhi and NCR market constitutes 8-10% of our market share for both Innova and Fortuner. Moreover, the unrest in Haryana further impacted our business in that region with dealerships being closed for more than a week,” said N Raja, Director & Senior VP (Sales & Mktg), TKM.

Ford India was also in negative terrain and down 7.5%, selling 5,483 vehicles in the domestic market during February 2016, compared to 5,930 vehicles in February last year. However, the company’s exports totaling 11,823 units soared by handsome 77.8% y-o-y during the month.

Anurag Mehrotra, ED (Mktg, Sales and Service), Ford India, said: “The Indian automotive industry continues to deal with weak consumer demand as witnessed by increasing levels of discounting in the market. The Union Budget should deliver on driving rural growth & infrastructure development.”

Riding on its new kid on the block, viz. Kwid, Renault India registered a whopping 158.4% surge in its domestic sales that added up to 8,834 units in February 2016 as against 3,419 units in February 2015. Kwid, Autocar India’s Car of the Year 2016, continues to drive Renault’s expansion plans in India with customer orders crossing the 100,000 mark. The company has ramped up the production capacity at its Chennai plant to meet the growing demand for the product, apart from expansion of its sales & service to 205 from just 14 sales & service facilities in mid-2011. The company is targeting to reach 240 facilities by the end of this year.

Two-wheeler Sales on a Correction Course

Two-wheeler sales staged a smart recovery in February 2016 after being in slow lane for a couple of months. Domestic sales of two-wheelers grew by a healthy 12.8% y-o-y to 1,362,219 units during the month.

Hero MotoCorp, India’s largest two-wheeler manufacturer, reported domestic sales of 536,928 units in February, which translated into a decent 13.0% uptick vis-à-vis domestic sales figure of 475,251 units in February 2015. The company said, it managed the production at its Gurgaon, Dharuhera (Haryana) and Neemrana (Rajasthan) plants despite the local agitation, which disrupted life in the region. “The company made up for the lost days when despatches from these plants were affected due to the blockade of the national highways and other roads,” said the company release.

Honda Motorcycle & Scooter India (HMSI)’s domestic sales at 351,424 units in February 2016, were virtually stagnant, crawling up by paltry 1.0% vis-à-vis 347,806 units in the same month previous year.

TVS Motor Company reported an 11.4% increase in its total domestic two-wheeler sales, clocking 183,199 units in February 2016, as against 164,508 units in February 2015. The company’s two-wheeler exports, however, declined 9.8% y-o-y to 27,949 units during the month.

Bajaj Auto was yet another two-wheeler major to clock a healthy 30.5% growth in its domestic two-wheeler sales that aggregated 151,141 units in February 2016 vis-à-vis 115,840 units a year ago. The company’s two-wheeler exports, on the other hand, were down 16.1% y-o-y to 84,141 units during the month.

India Yamaha Motor witnessed domestic sales of 56,960 units in February 2016, which reflected a spectacular 50.0% growth over 37,982 units sold in the domestic market a year ago.

Royal Enfield continued to drive in fast lane. The month of February saw the company’s domestic sales soar by 61.3% y-o-y to 47,567 units. The exports were also in overdrive, growing by a phenomenal 112.1% y-o-y to 1,589 units in February 2016.

M&HCV Sales Stay Firmly on Track

Building on the positive momentum, the commercial vehicle segment sustained its strong growth in February 2016, with domestic sales of CVs (including M&HCVs and LCVs) rising by an impressive 20.0% y-o-y to 62,359 units during the month. 

Tata Motors reported domestic sales of 28,397 CVs in February 2016 – up 19.0% y-o-y. Domestic sales of Tata LCVs at 13,525 units were higher by 7.3%, while domestic sales of Tata M&HCVs witnessed a phenomenal 31.9% increase y-o-y to 14,872 units during the month.

Ashok Leyland was again the star performer among CV players. The company’s overall domestic sales at 12,443 units in February 2016 soared by 29.4% (February 2015: 9,615 units). 

VE Commercial Vehicles clocked a spectacular 53.7% growth, selling 4,264 units in the domestic market, as against 2,774 units in February 2015.

Mahindra Trucks & Buses, selling 524 M&HCVs in domestic market during February 2016, recorded a healthy 35.8% rise over 386 units in February 2015. Domestic sales of Mahindra LCVs at 13,864 units were up 16.1% y-o-y.

With the Union Budget 2016 imposing an infrastructure cess ranging 1% to 4% on passenger vehicles, the sales are expected to take a hit in the near term. However, the CV segment, especially M&HCVs, will be major beneficiary of the infrastructure spend of Rs. 218,000 crore proposed in the Budget.




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