Low Base Boosts Auto Sale

The year 2017 was dynamic for the auto industry with series of disruptions from Demonetization to GST roll out. Despite the challenges and a temporary slowdown, industry hit back with a steady growth in sales.

The auto sector also benefited from the year-end discounts as a precursor to the price hikes ranging between 2-5 per cent, announced by vehicle manufacturers kick-starting from January 2018.

Passenger vehicle sales were a mixed bag in December. OEMs like Maruti Suzuki India, Tata Motors and Honda Cars India registered strong growth while Mahindra & Mahindra, Ford India and Toyota Kirloskar in negative terrain. The country’s second-largest carmaker, Hyundai Motor India, posted nearly flat volume growth. Commercial vehicles have led from the front in domestic sales. CVs witnessed a healthy double-digit growth during December because of good monsoon, improved rural sentiment and increased production of BS-IV compliance vehicles; signs of revival in three-wheeler sales following government’s decision to end permit system and revival in exports due to improving global economy. Nipping at their heels was the two-wheeler segment, wherein the majority of the OEMs posted a robust performance, mostly double-digits. 

PASSENGER VEHICLE SALES – LEADER CONTINUED ITS MOJO

Total passenger vehicle sales in domestic market at 239,712 units in December 2017 grew by 5.22% from 227,823 units during the same month last year.

Maruti Suzuki India Ltd (MSIL), which is aiming at a target of 2.0 million unit sales annually by 2020, clocked a 9.4% uptick in its passenger vehicle sales that stood at 137,146 units in December 2017, compared to 125,418 units a year earlier. The company’s domestic sales accounted a growth by 11.6 per cent to 126,416 units from 113,236 units in the same month last year.

Sales of mini segment cars, including Alto and WagonR, witnessed a 2.0% uptick to 32,146 units during the month under review from 31,527 units in December 2016. Even the sales of company’s flagship mid-sized sedan Ciaz fell by 35.8%, continuously in two months, to 2,382 units during the month.

Meanwhile, the compact segment of Maruti Suzuki India featuring offerings like Swift, Estilo, Dzire and Baleno went on post growth of 23.2% in December. Sales of company’s utility vehicles, including Gypsy, Grand Vitara, Ertiga, S-Cross and compact SUV Vitara Brezza increased by 19.9% to 19,276 units in December, from 16,072 units in the same month of 2016.

Hyundai Motor India Ltd  (HMIL) sold 40,158 units in domestic market during December 2017, slightly up 0.3% (December 2016: 40,057 units). The company’s exports at 22,741 units during the month, however, impressively increase by 32.9% y-o-y. 

HMIL registered the record sales by surpassing its Calendar Year 2017 Business Plan with highest-ever domestic sales of 5,27,320 units and Cumulative sales of 6,78,221 Units.

Commenting on CY 2017 Performance, Y K Koo, MD & CEO, HMIL, said, ”The Calendar Year 2017 has been an Year of Performance for Hyundai Motor India surpassing its business plan of 2017 registering highest-ever domestic volume of 5,27,320 units, a growth of 5.4% on strong performance of the newly launched super sedan Next Gen VERNA along with GRAND i10, ELITE i20 and CRETA. The positive momentum in Urban and Rural retail sales supported with strong After-Sales Service and Low-cost of ownership has gained customer confidence to become most loved and trusted brand in India.” 

UV major, Mahindra & Mahindra (M&M) witnessed de-growth of 7.0% in passenger vehicles segment (which includes UVs, Cars and Vans) domestic sales of 15,531 vehicles, against 16,698 vehicles a year ago. However, the total domestic sales of company stood at 36,979 vehicles during December 2017, as against 34,411 vehicles during December 2016, registering a growth of 7%. In the Medium and Heavy Commercial Vehicles segment, M&M sold 1,193 vehicles for the month, registering an impressive growth of 151%. Exports for December 2017 stood at 2,221 vehicles, a growth of 8%.

Commenting on the monthly performance, Rajan Wadhera, President, Automotive Sector, Mahindra & Mahindra, said, “We are happy to have ended December 2017 with a growth of 8%. Our commercial vehicles growth for December has been encouraging at 24% and we are particularly buoyed by our ongoing strong performance in the MHCV segment which indicates vibrancy in the economy. Global automotive trends such as electric vehicles and shared mobility will be key indicators for 2018 and at Mahindra we would continue to be a key and innovative player.”

Continuing its turnaround, another home-grown player, Tata Motors sold 16,089 passenger vehicle, including cars, utility vehicles and vans in domestic market during December 2017, which marked a growth of 33.9%, vis-a-vis 12,012 units in December last year. The company recorded the highest ever December sales for Passenger Vehicles since 2012 and the retail sales for this month was also the highest in last 6 years. Strong performance of Tiago, Tigor, Hexa and Nexon drove the growth momentum for Tata Motors. The UV segment recorded a growth of 406% over last year on the back of strong demand of the newly launched Nexon and Hexa. 

Riding on strong demand of Honda City and WR-V, Honda Cars India Ltd (HCIL) clocked sale of 12,642 units in India, witnessing a growth of 25.5% in December 2017 (December 2016: 10,071 units). The model-wise domestic sales break-up of HCIL in December was as follows: WR-V – 3,760 units, City – 4,365 units, Jazz – 1,891 units, Amaze – 1,415 units, BR-V - 880 units.

Yoichiro Ueno, president & CEO, Honda Cars India, said, “2017 has been a milestone year for Honda Cars in India, as our best seller Honda City completes two decades of success in India. Honda City has emerged as the highest selling mid-size sedan during 2017.”

Toyota Kirloskar Motor (TKM) sold a total of 10,793 units in the domestic market in December 2017, a negative growth by 15.3% (December 2016: 12,747 units). However, the company recorded a growth of 5% in the annual sales (January to December) in 2017 as compared to 2016 and achieved the milestone of recording the highest ever IMV sales in 2017 (73,000 units of Innova and 24000 units of Fortuner) in India. 

N Raja, Director & Sr VP, Sales & Mktg, TKM said, “Toyota has sustained a positive growth since last three months. With maximum utilization of Plant 1 and maintaining lean inventory, we are trying to reduce the waiting period of Innova and Fortuner for our customers.”

Ford India reported a decline of 8.6% in domestic sales y-o-y to 5,087 units in December 2017 compared to 5,566 units a year ago, while exports stood at 22,171 units (December 2016: 17,904 units). 

Likewise, Renault India also registered a negative percentage rate of 22.1 % y-o-y to 8,763 units (December 2016: 11,244 units) in its domestic sales in December 2017.

TWO-WHEELER SALES PICK UP PACE IN DECEMBER

The last month of calendar year 2017 registered healthy growth of 41.5 per cent to 1,287,592 units YoY in the domestic two-wheeler market. 

Hero MotoCorp sold 472,731 units in December 2017, as against 330,202 units in the corresponding month last year, registering a strong growth of 43.2%. Speaking about the sales numbers, Pawan Munjal, CMD and CEO, HMCL said, “2017 has been a landmark year in our strategic endeavour to further consolidate our market leadership. Despite the challenging industry environment, we successfully created a series of benchmarks, not only for the Indian market but also for the global automotive industry.”

Growing faster than industry, Honda Motorcycle and Scooter India posted a huge surge of 77.1% in the domestic market, with total sales of 390,439 units (including exports) in December 2017, as against 228,763 units in same month last year. ”New capacity expansion, three new product launches and increased network penetration in tier-II and tier-III markets resulted in Honda successfully breaching the 5 million sales mark for the first time in 2017,” HMSI Senior VP - Sales & Mltg, Yadvinder Singh Guleria said. 

TVS Motor registered massive growth of 38.9% with sales (including exports) increasing from 184,944 units in December 2016 to 256,909 units in December 2017. 

The Pune-based bike maker, Bajaj Auto notched up 29.7% increase, selling 292,475 units in December. 

Popular motorcycle manufacturer, Royal Enfield clocked 16.1% uptick in its domestic sales that added up to 65,367 units in December this year (December 2016: 56,316 units).

Domestic sales of India Yamaha Motor at 44,517 units in Dec’17 were slugging vis-a-vis 49,775 units, a year ago.

Suzuki Motorcycle India Pvt Ltd (SMIPL) reported a strong 51.0% rise in its total sales at 40,017 units in December as against 26,497 units in the same month last year. 

COMMERCIAL VEHICLE RIDES SIGNIFICANT GROWTH

The commercial sector bounced back strongly after setbacks from demonetization and the BS-IV transition in 2017 with a massive performance of 52.6% in domestic sales at 82,362 units in December 2017 as compared to 53,966 units in December 2016. M&HCV recorded the sale 39,439 units vis-a-vis 22,788 units in December 2016. The segment grew by 73.0%. However, passenger carriers in this segment have de-grown by 20.4%.

Tata Motors’ commercial vehicles sales in domestic market in December 2017 were at 38,538 units, a growth of 61.8% compared to 35,825 units in December 2016.

Ditto, Ashok Leyland posted a huge surge of 84.4% in December 2017 with total sales of 17,884 vehicles, as against the sales of 9,700 vehicles in the same month last year.

Commercial vehicle sales of Mahindra & Mahindra (M&M) in the Indian market aggregated 17,552 units in November 2017 – up 23.9% y-o-y.

V E Commercial Vehicles sold 5,177 units in December 2017 in Indian market as compared to 2,948 units in December 2016, recording a growth of 75.6%. This includes 5,045 units of Eicher brand and 132 units of Volvo brand.

With the birth pangs of BS-IV and GST left far behind, 2018 will be a year to watch out for as the Indian auto sector builds further on its strengths and gains growth.

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