Auto Market Driving Out of Demonetisation Slump

2018 kick-started on a positive note for the Indian automotive industry, with most of the vehicle segments marching ahead with good growth. 

PASSENGER VEHICLE– POST MIXED SALES

Total passenger vehicle sales in domestic market at 285,477 units in January 2018 grew by 7.57 per cent, up from 265,389 units during the same month last year.

Maruti Suzuki India (MSIL) clocked a 4.1% uptick in its domestic passenger vehicle sales that stood at 139,189 units in January 2018, compared to 133,768 units a year earlier. The company's exports grew  by 3.0 per cent to 10,608 units from 10,295 units in the same month last year.

Sales of mini segment cars, including Alto and WagonR, witnessed a 12.2% down to 33,316 units during the month under review from 37,928 units in January 2017. Even the sales of company's flagship mid-sized sedan Ciaz also fell by 22.5%, continuously in three months, to 5,062 units.

Meanwhile, the compact segment of MSIL featuring offerings like Swift, Estilo, Ignis, Celerio Dzire and Baleno went on to post growth of 21.6% in January. Sales of company's utility vehicles, including Gypsy, Grand Vitara, Ertiga, S-Cross and compact SUV Vitara Brezza increased by 26.8% to 20,693 units in January, from 16,313 units vis-a-vis January 2017.

Hyundai Motor India Ltd (HMIL) sold 45,508 units in domestic market during January 2018, up 8.3% (January 2017: 42,017 units). The company’s exports at 10,708 units during the month, increased by 9.1% y-o-y and cumulative sales of 56,216 units in January 2018 with a growth of 8.5% over January 2017.

Commenting on the sales performance, Rakesh Srivastava, Director - Sales & Mktg, HMIL, said “2018 has started on a positive and promises progressive growth for the industry, with Hyundai volume growth of 8.3% on strong performance of Grand i10, Elite i20, Creta & Next Gen Verna meeting customer aspirations on improved buying potential, led by stable micro economic factors.” 

UV major, Mahindra & Mahindra witnessed an uptick of 17.7% in passenger vehicles segment (which includes UVs, Cars and Vans) domestic sales of 23,656 vehicles, against 20,093 vehicles a year ago. However, the total domestic sales of company stood at 49,402 vehicles during January 2018, as against 37,039 vehicles during January 2017, registering a growth of 33.4%. In the M&HCV segment, M&M sold 1,168 vehicles for the month, registering an impressive growth of 66.6%, in second straight month. Total exports for M&M in January 2018 stood at 2,616 vehicles, a growth of 15.7%.

Commenting on the monthly performance, Rajan Wadhera, President, Automotive Sector, M&M, said, "We are happy to have begun the calendar year with an overall healthy growth of 32%. We have seen a good growth across our portfolio of products both personal & commercial. The growth in the MHCV segment lends credence to the positive momentum in the economy, which can be seen even in the growth numbers of our SCV portfolio. We believe this momentum will continue in our Q4FY2018 numbers..

Continuing its turnaround, another home-grown player, Tata Motors sold 21,872 passenger vehicle, including cars, UVs and vans in domestic market during January 2018, which marked a robust growth of 48.6%, vis-a-vis 14,721 units in January last year. Strong performance of Tiago, Tigor, Hexa and Nexon drove the growth momentum for Tata Motors. The UV segment recorded a growth of 188% over last year on the back of strong demand of the newly launched Nexon and Hexa. 

Honda Cars India (HCIL) registered monthly domestic sales of 14,838 units (January 2017: 15,592 units) and exports of 410 units (January 2017: 981 units) in January 2018, a negative growth by 4.8% and 58.2%, respectively, compared to last year in the same month. The plus point for the Japanese carmaker is that it held on to the cumulative growth of 17 per cent selling 144,802 units during April 2017 to January 2018, against 124,114 units last year in the same period. 

Toyota Kirloskar Motor (TKM) sold a total of 12,351 units in the Indian market in Jan’18, strong growth by 19.5% (January 2017: 10,336 units). The company exported 963 units of Etios series in January, thus, clocking a total of 13,314 units. 

Commenting on the sales performance, N Raja, Dy MD, TKM said, “It is a delight to usher in the new year with a double digit growth. We are happy to have sustained the positive growth momentum post GST. The customer demand has consistently been strong and we have catered to the growing customer demand. The success story of Innova Crysta and Fortuner sales growth continues to the new year.”

Ford India achieved a total sales growth of 58 per cent to 22,535 vehicles, against the 14,259 vehicles sold during the same month last year. The US carmaker's domestic wholesales stood at 9,450 vehicles in January, up from 7,995 vehicles in the same month last year, registering an 18.2 per cent growth. Exports on the other hand, in the month of January 2018 grew to 13,085 vehicles, as against 6,264 vehicles exported in January 2017, registering a massive growth of 109.0 per cent.

French carmaker, Renault India is on the path of rough road after a spectacular show and registering a negative percentage rate of 21.3% y-o-y to 6,919 units (January 2017: 8,791 units) in its domestic sales in January 2018.

TWO-WHEELER SALES ACCELERATES IN JANUARY 2018

The Indian two-wheeler industry recorded impressive YoY growth of 33.43 per cent in January 2018 to 1,684,066 units as against 1,262,140 units a year ago. Scooters recorded the fastest growth of more than 48 per cent YoY, motorcycle sales grew by 28.64 per cent YoY. Meanwhile, in mopeds wherein TVS Motor commands a monopoly in the domestic market, saw YoY growth of 10 per cent.

Fortifying its dominant market leadership at the onset of the New Year, Hero MotoCorp Ltd, reported yet another month of six-lakh plus sales. The company sold 641,501 units of two-wheelers in January 2018, as against 487,088 units in the corresponding month of the previous year (January 2017), thus, registering a strong sales growth of over 31%. 

Ashok Bhasin, Head of Sales, Marketing & Customer Care, Hero MotoCorp, said “Our robust double digit growth in overall two-wheeler sales has been driven by very strong growth in both Scooters and Motorcycles. Our cumulative volume for the Financial Year 2018 (Apr’17-Jan’18) has already crossed the six million sales milestone. We are confident of maintaining our strong growth trajectory and setting a new industry benchmark in sales for the full year.”

Growing faster than industry, Honda Motorcycle and Scooter India (HMSI) posted a surge of 33.0% in the domestic market, with total sales of 517,778 units (including exports) in January 2018, as against 389,313 units in same month last year. Scooter sales in the same month grew by a whopping 39.6 per cent from 228,811 units in January 2017 to 319,318 units in January 2018. Motorcycle sales in the same month grew by 21.8 per cent from 139,161 units in January 2017 to 169,537 units in January 2018.

"FY2017-18 is already shaping up as a historic year for Honda. In just 10 months of this fiscal, Honda has added over 9 lakh new customers and crossed 5 million sales mark in the shortest time. The Government announcements in Budget 2018 too should accelerate rural demand. With firm thrust on rural economy is evident from increasing Kharif crop MSP to 1.5 times the production cost. The infrastructure focus of the government is very strong on rural areas and highways. With almost 50% of two-wheeler demand coming from rural and semi-urban India, Budget 2018 should have a positive impact on customer sentiments," said Y S Guleria, Sr VP - Sales and Mktg, HMSI.

TVS Motor registered massive growth of 30.1% with sales (including exports) increasing from 202,209 units in January 2017 to 262,995 units in January 2018. 

The Pune-based bike maker, Bajaj Auto notched up 36.4% increase, selling 288,936 units in January 2018 in which Exports figured at 125,825 units during the month, as against 211,824 units in the month of January 2017. 

Ditto, popular motorcycle manufacturer, Royal Enfield clocked 31.1% uptick in its domestic sales that added up to 76,205 units in January this year (January 2017: 58,133 units).

Domestic sales of India Yamaha Motor at 57,553 units in January 2018 were in north-pole vis-a-vis 34,117 units, a year ago.

Suzuki Motorcycle India Pvt Ltd (SMIPL) reported a 30% rise in its total sales at 49,762 units in January as against 38,289 units in the same month last year. 

Strong Growth in January Demonstrate CV Sales Performance

Commercial vehicle sales remain positive in the first month of the calendar year 2018, all OEMs continue to report positive growth. However, there is an indication of growth moderating this month. As economic activities start improving on the back of a strong focus on infrastructure development, along with logistics sector witnessing a growth opportunity from the demand of the construction sector, leading to CV segment witness a sustain growth over the last 3-4 months. Industry analysts anticipate the Q4 FY 2017-18 likely to be positive for the CV sector.

Tata Motors’ commercial vehicles sales in domestic market in January 2018 were at 37,569 units, a growth of 40.7% compared to 26,707 units in January 2017.

Likewise, Ashok Leyland posted a pitch of 21.7% in January 2018 with total sales of 18,100 vehicles, as against the sales of 14,872 vehicles in the same month last year.

Commercial vehicle sales of Mahindra & Mahindra (M&M) in the Indian market aggregated a strong performance of 21,002 units in January 2018 – up 51.2% y-o-y.

V E Commercial Vehicles sold 6,099 units in January 2018 in Indian market as compared to 3,862 units in January 2017, recording a growth of 57.9%. This includes 6,010 units of Eicher brand and 89 units of Volvo brand.

The industry could be seen to be going strong with the continued momentum from the second half of CY2017, with factors such as implementation of the GST pushing market demand. With a host of new unveils and launches at the 2018 Auto Expo, the Indian automotive sales is set to witness even more exciting performance in the days to come, with most vehicle manufacturers looking to tap into the overall positive sentiment in the market.

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