Pre-Festive Stocking Boosts Sales Numbers in August

Vehicle sales stayed on course, clocking decent sales numbers in August. Brushing aside the GST glitches and concerns, all the segments of the auto market posted healthy growth. Total domestic sales encompassing various vehicle categories, namely, passenger vehicles, commercial vehicles and 2/3-wheelers, grew by 14.5% to 2,302,158 units during the month of August 2017 from 2,010,802 units a year ago.

Passenger vehicle sales maintain growth momentum

Passenger vehicle sales were in fast lane during August. The sales numbers of passenger vehicles were boosted, to some degree, by expected increase in prices of mid-segment & luxury-segment cars and SUVs due to impending hike in cess on these categories of cars. Passenger vehicle sales in the domestic market at 294,335 units in August 2017 posted a 13.8% uptick vis-à-vis 258,737 units in August last year.

Setting the pace, the car market leader – Maruti Suzuki India (MSI), saw its domestic sales grow by a handsome 26.2% to 151,270 units in August 2017. The company’s exports were, however, down 4.6% y-o-y to 11,576 units during the month. 

Apart from flat sales for the entry-level hatchback duo of the Alto and Wagon R, which sold 35,428 units, other segments, in which the company is present, witnessed healthy growth. Domestic sales of quintet of compact cars (Swift, Celerio, Ignis, Baleno and Dzire) soared 62.4% to 74,012 units in August 2017 (August 2016: 45,579 units), riding on strong demand for the premium Baleno hatchback and the new Dzire sedan. Baleno sold a total of 19,153 units in July 2017, its best-ever monthly total since launch in October 2015. Ciaz clocked domestic sales of 6,457 units, up 3.9% (August 2016: 6,214 units. The company’s utility vehicles – Gypsy, Ertiga, Vitara Brezza and S-Cross – witnessing a healthy 27.6% y-o-y growth, contributed 21,442 units to the domestic sales tally.

The second largest PV player in the country, Hyundai Motor India Ltd (HMIL), sold 47,103 units in domestic market during August 2017, registering a growth of 9.0% (August 2016: 43,201 units). The company’s exports slid sharply by 22.4% y-o-y to 12,802 units during the month. Commenting on the August sales, Rakesh Srivastava, Director - Sales and Mktg, HMIL, said, “Hyundai volumes at 47,103 units grew by 9% on the strong acceptance of the next-gen Verna with more than 7,000 bookings within 10 days of launch along with strong demand for the Grand i10, Elite i20 and Creta in a market fuelled with speculations on the GST cess increase.”

Mahindra & Mahindra (M&M)’s domestic passenger vehicle sales at 19,325 units in August 2017, reflected a 5.9% increase over the corresponding sales figure of 18,246 units in August 2016. Rajan Wadhera, President, Automotive Sector, M&M, commented: “We are happy with our performance in August. Our passenger vehicles grew by 6% and our overall sales grew by 4%. As we get into festive season, we are confident of a good growth over the next couple of months.”

Tata Motors, another home-grown player in automotive space, clocked domestic sales of 16,261 passenger vehicles, including cars, utility vehicles and vans, in August 2017, which marked a growth of 11.5% over 14,580 passenger vehicles sold by the company in domestic market a year ago. While domestic sales of Tata cars remained flat at 11,462 units, the UV sales at 2,878 units, driven by the Tata HEXA, grew by whopping 83.7% y-o-y, albeit on a low base.

Honda Cars India Ltd (HCIL), staying on course, registered a healthy 24.6% growth in domestic sales that stood at 17,365 units in August 2017, (August 2016: 13,941 units). The company has been maintaining strong sales momentum in the current fiscal year and has sold 73,012 units during April-August 2017 with a cumulative growth of over 22% (April-August 2016: 59,821 units). City sedan returned as the best-selling car from the Honda stable with sales volume of 5,538 units, followed by WR-V (5,200 units), Jazz (2,747 units), Amaze (1,928 units), BR-V (1,247 units), Brio (640 units), CR-V (55 unitts), and Accord Hybrid (10 units).

Yoichiro Ueno, President and CEO, HCIL said, “Honda Cars India continues to record strong sales in August led by the City and WR-V. Festive purchases have already begun in some parts of the country and we expect the festival season to further boost our sales numbers in the next two months.”

Toyota Kirloskar Motor (TKM) sold 12,017 units in domestic market during August 2017, down 6.1% vis-à-vis 12,801 units in August 2016. “Our sales numbers this month are not truly reflective of the existing customer orders. After the announcement on potential cess hike, there was a considerable rise in customer enquiries and orders.  Yet, we had production limitations, which held us back from catching up with the high demand, commented N Raja, Director & Sr VP - Sales & Mktg, TKM.

Ford India witnessed a 9.0% decline in domestic sales that added up to 7,777 units in August 2017, as against 8,548 units a year ago. Ford India’s exports were also in negative terrain falling sharply by 55.4% y-o-y to 7,963 units.

Recovery in CV sales firming up

Recovering from the disruption caused by implementation of BS IV norms and GST, commercial vehicles carried forward the momentum of July to August. At 65,310 units in August 2017, domestic sales of CVs jumped by a healthy 23.2% vis-à-vis 53,001 units in August 2016. The recovery was all-pervasive with all major CV players clocking growth.

Commercial Vehicle Business Unit of Tata Motors recorded a staggering 35.5% upsurge in domestic sales of Tata trucks and buses, which aggregated 29,645 units in August 2017, as against 21,886 units in August last year. According to the company, the M&HCV segment witnessed a strong pickup in demand. The domestic sales of Tata M&HCVs soared by 38.7% on the back of continuously increasing acceptance of SCR technology and driven by the stricter implementation of regulatory norms on overloading, as well as sector-specific (trucks and construction tippers) demand. 

Ashok Leyland too reported an impressive 21.6% growth in its overall CV sales in the Indian market, which stood at 11,937 units in August 2017 (August 2016: 9,818 units).

Domestic commercial vehicle sales of Mahindra & Mahindra at 16,303 units during August 2017 were up 16.5%, compared to 13,993 units in August 2016. 

VE Commercial Vehicles sold 3,818 Eicher branded trucks & buses in the domestic market during the month of August 2017, which marked a 10.7% growth (August 2016: 3,450 units). 

Two-Wheelers on high growth trajectory

Riding on the improving sentiment in rural market, the two-wheeler sales remained in fast lane. Total domestic sales of two-wheelers, across companies, grew by 14.7% y-o-y to 1,891,062 units in August 2017. The two-wheeler exports at 236,505 units witnessed a 19.8% uptick. Hero MotoCorp (HMCL), Honda Motorcycle & Scooter India (HMSI), Royal Enfield and Suzuki Motorcycle India recorded their best-ever monthly sales. 

Hero MotoCorp clocked its highest-ever sales for any single month in August 2017. It sold total of 678,797 units including exports (17,307 units) during the month. The domestic sales stood at 661,490 units, growing by 10.0% y-o-y. August 2017 marked the fourth consecutive month when Hero MotoCorp has managed to sell more than 600,000 units. 

Recording its best-ever monthly sales, Honda Motorcycle & Scooter India (HMSI) sold 622,244 units (including exports) in August 2017. This is the first time that the company has breached the 600,000-unit sales mark. Domestic sales of HMSI totalled 586,237 units – up 25.7% y-o-y, which is also its best-ever performance in the Indian market. 

Y S Guleria, Sr VP - Sales and Mktg, HMSI, said, ”On the back of strong festival demand matched with new additional capacity, Honda has breached the 600,000 units sales mark for the first time in August 2017. At the same time, our strong overseas demand momentum has resulted in exports crossing the 36,000-unit mark. On the domestic front, both scooters and motorcycles touched their highest sales mark.” 

TVS Motor Company, the third largest two-wheeler player in the Indian market, sold 270,544 two-wheelers in August 2017, growing by 13.2% y-o-y. TVS two-wheeler exports leapfrogged by 33.7% y-o-y to 45,604 units during the month.

Pune based Bajaj Auto recorded domestic sales of 171,664 units in August 2017, posting a marginal 1.7% decline vis-à-vis the company’s domestic sales volume of 174,719 units in August last year. The company’s two-wheeler exports, however, witnessed a 6.7% rise at 112,197 units in August 2017, as against 105,192 units a year ago.

India Yamaha Motor reported domestic sales of 77,887 units (including Nepal) in August, a 4.0% uptick y-o-y.

Continuing its dream run, Royal Enfield registered its best-ever domestic sales of 66,872 units in August 2017, up 22.2% y-o-y. The company has recently commenced production at its third manufacturing facility at Vallam Vadagal near Chennai. Royal Enfield’s combined production capacity now stands at 825,000 units across the three plants for FY2017-18. 

Likewise, Suzuki Motorcycle India too reported robust sales in August 2017. The company mustered domestic sales of 47,745 units in August 2017, notching up a stupendous growth of 49.7% y-o-y. 

Vehicle sales have grown at decent clip in July and August. Due to the early advent of festive season this year and stocking by the OEMs at the dealerships, the retail sales may not be entirely in tune with the wholesale numbers. However, the normal monsoon rains and steadily growing economy hold out a promising year ahead for the auto market.

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