Festive Season Brings in Cheers for Auto Market 

Vehicle sales rode on festive spirit to record a decent 10.0% growth in September 2017. Witnessing all-round buoyancy, total domestic sales across all segments, including 2/3-wheelers, passenger vehicles and commercial vehicles, added up to 2,490,034 units in September 2017 vis-à-vis 2,263,620 units a year ago.

Passenger vehicles speeding towards a new high in FY’18

Passenger vehicle sales, aided by new models and Navratris that is considered auspicious period for buying assets in major part of the country, remained on growth trajectory. Total passenger vehicle sales in domestic market at 309,955 units in September 2017 grew by 11.3% from 278,428 units during the same month last year.

Maruti Suzuki India (MSI), which is aiming at a target of 2.0 million unit sales annually by 2020, set the tone for passenger vehicle sales momentum during the month. The company clocked a 9.6% uptick in its domestic passenger vehicle sales that stood at 150,521 units in September 2017, compared to 137,277 units a year earlier.

Domestic sales of the company’s compact cars - Swift, Celerio, Ignis, Baleno and Dzire - witnessed a whopping 44.7% surge to 72,804 units in September 2017 (Sep’16: 50,324 units), on the back of continuing robust demand for the premium Baleno hatchback and the new Dzire sedan. The new Dzire has turned out to be a trump for Maruti Suzuki, quickly becoming the largest selling car in India displacing Alto that had been reigning supreme for over 17 years. The quartet of Gypsy, Ertiga, Vitara Brezza and S-Cross in UV segment contributed 19,900 units (+8.0% / Sep’16: 18,423 units) to the company’s domestic sales tally. Domestic sales of the entry-level hatchback duo of the Alto and Wagon R were down 13.3% to 38,479 units, while the premium Ciaz sedan saw its sales decline by 14.4% y-o-y to 5,603 units during the month. MSI’s two vans, Omni and Eeco together sold 13,735 units in the Indian market during September, crawling up by just 0.9% (Sep’16: 13,618 units).

Hyundai Motor India Ltd (HMIL), the No. 2 passenger vehicle player in the country, sold 50,028 units in domestic market during September 2017, up 17.4% (September 2016: 42,605 units). The company’s exports at 12,257 units during the month, however, slumped by 26.2% y-o-y. Rakesh Srivastava, Director - Sales & Mktg, HMIL, commented, “Hyundai achieved landmark sales of 50,028 units with growth of 17.4%, on the multiplier effect of phenomenal performance of newly launched Next Gen VERNA with sales of over 6,000 units, along with strong pull for CRETA, ELITE i20 and GRAND i10 in this festive season.” 

UV major, Mahindra & Mahindra registered domestic sales of 25,327 passenger vehicles in September, growing by 23.5% vis-a-vis 20,537 units a year ago. The company’s mainstay, UVs, including Scorpio, Bolero, XUV500, TUV300 and KUV100 accounted for the bulk of the company’s passenger vehicle sales in domestic market, which numbered 24,109 units, reflecting a healthy 23.5% increase y-o-y. 

Rajan Wadhera, President, Automotive Sector, M&M said, “At Mahindra, we are very happy with our September 2017 performance with our passenger & commercial vehicle sales having grown at 23% & 19%, respectively. We are particularly happy with the performance of our Scorpio brand, which has had its highest monthly sales in September, since inception.”

Another home-grown player, Tata Motors sold 19,334 passenger vehicles, including cars, utility vehicles and vans in domestic market during September 2017, which marked an 18.2% uptick vis-à-vis 16,351 units in September last year.  The growth was driven by the company’s latest offerings - Tiago, Tigor and Hexa. 

Honda Cars India Ltd (HCIL) clocked domestic sales of  18,257 units, witnessing a growth of 21.4% (Sep’16: 15,034 units). The modelwise domestic sales break-up of HCIL in September was as follows: City (6,010 units), WR-V (4,834 units), Brio (504 units), Jazz (3,001 units), Amaze (2,561 units), BR-V (1,298 units), CR-V (31 units), and Accord Hybrid (18 units). Commenting on the numbers, Yoichiro Ueno, President and CEO, HCIL, said, “Honda Cars India is witnessing one of its fastest growth years in sales, backed by strong performance of our latest models, City and WR-V. We have had a good start to the festive season. With the festive purchase on full swing, our sales outlook for the season is very promising.”

Toyota Kirloskar Motor (TKM)’s  sales tally in the Indian market stood at 12,3354 units during September 2017, growing marginally by 2.2% (Sep’16: 12,067 units). N Raja, Director and Sr VP, Sales & Mktg , TKM, said, “We revised the price of our products on September 12, 2017 in line with the cess hike, which nearly reflects the prices in the pre-GST scenario. We are happy that our customer demand had minimum impact of the cess hike and the festive season has ushered in a positive growth in the domestic sales. With demand on the rise, the current waiting period for the Innova Crysta has gone up to around 6-8 weeks and Fortuner to 10-12 weeks respectively.”

Meanwhile, Ford India’s domestic sales at 8,769 units in September 2017, slipped by 2.8% from 9,018 units a year ago. The company attributed the drop in sales to the new model launch planning, along with ongoing constraints in the supply chain.  

Two-Wheelers stay on course

Two-wheeler sales sustained the momentum in September. Total two-wheeler sales in the Indian market at 2,041,024 units grew by 9.1% y-o-y during the month.

Hero MotoCorp despatched 720,739 units (including exports) in Sep’17, surpassing the 7-lakh-unit mark in a month for the first time, which the company said was a global benchmark. Domestic sales at 703,473 units grew by 7.5% y-o-y, while the exports fell by 15.3% y-o-y to 17,266 units during the month.

Ashok Bhasin, Head of Sales, Mktg and Customer Care, Hero MotoCorp, said, “With close to three weeks still remaining in the festival season, we have set an all-time record by selling over a million motorcycles and scooters in domestic retail sales in the festive period so far, further consolidating our market leadership.” 

After the highest ever single month sales crossing 6-lakh mark in August, Honda Motorcycle and Scooter India (HMSI) continued to fire all cylinders in the month of September. HMSI’s domestic sales stood at 569,822units (versus 539,473 units in Sep’16), while exports continued to glide over 30,000 mark at 32,110 units (compared to 29,355 units in Sep’16). The company, in the process, surpassed 6-lakh-unit mark for two months in a row (Aug’17 and Sep’17).

Y S Guleria, Sr VP - Sales & Mktg, HMSI, commented, “On Dussehra alone, Honda’s retails crossed 1 lakh mark for the first time ever. This is the first time ever that over one million Indians are already celebrating with their new Honda two-wheeler this festival, while Dhanteras and Diwali are yet to come in October.”

TVS Motor reported bumper domestic sales at 307,160 units in September 2017, up 20.9% (Sep’16: 253,974 units). The company’s two-wheeler exports too witnessed a robust 30.5% y-o-y growth to 43,694 units during the month. 

Bajaj Auto was back in positive territory in September for the first time in CY2017. The Pune-based motorcycle manufacturer sold 247,418 units in September 2017, up 7.3% over 230,502 units in September 2016.

Royal Enfield continued its dream run, selling 69,393 units in domestic market during September 2017, which reflected a growth of 21.8% y-o-y.

India Yamaha Motor was the only major two-wheeler player to have recorded a negative growth in September 2017, with its domestic sales skidding by 7.8% to 82,444 units in September from 89,423 units a year ago.  

Suzuki Motorcycle India sold 50,807 two-wheelers in domestic market during September 2017, clocking a healthy 37.1% increase (September 2016: 37,057 units). 

Commercial vehicle sales shift gears

Commercial vehicle sales are back on the track in Q2 FY2018 after the turbulent previous quarter. Building on the momentum of July and August, CV sales in the Indian market at 77,195 units in September 2017 recorded an impressive 25.3% jump vis-à-vis 61,621 units in September last year. 

Consolidating the gains of previous two months, Tata Motors witnessed a massive 30.1% surge in domestic sales of its CV, which aggregated 34,631 units in September 2017, compared to 26,610 units a year earlier. The company commented that the sales grew on the back of strong ramp-up in production, growing demand for new product launches and usual higher off-take during the festival season. Additionally, the sales were also boosted by strong growth in e-commerce segment sales and growing demand under Swachh Bharat drive.

Likewise, the second largest player in the Indian CV market, Ashok Leyland registered a strong 24.9% growth in domestic sales, clocking 13,755 units in September 2017 (Sep’16: 11,009 units). 

Mahindra & Mahindra came up with an impressive performance as well. The company notched up a 19.4% growth in domestic commercial vehicle sales that stood at 19,201 units in September 2017 vis-à-vis 16,081 units a year ago.

VE Commercial Vehicles sold 5,084 Eicher branded trucks and buses in the domestic market during Sep’17, posting a stellar 22.6% increase (Sep’16: 4,148 units). 

While the sales of 2-wheelers and passenger vehicles have stayed on course, the smart recovery in commercial vehicle sales is encouraging inasmuch, as the CV sales are barometer of the economic activity in the country. This augurs well for the auto market and economy as a whole.

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