Momentum in Auto Sales, Stays on Course

Auto industry’s sale momentum continued in February 2018. The month saw total sales of automobiles including exports growing at 23.23 per cent.  Overall the industry sales in the domestic market was in positive terrain with CVs, 2-Wheelers and 3-Wheelers achieving double digit growth compared to sales during the same month, the previous year.

While the passenger vehicles sales grew on back of new models, the rising fuel prices, inflation and a spurt in interest rates silted sales of the industry as financial year 2018 nears closure. Rise in passenger vehicle prices by some OEMS in January also had a tepid impact on sales.

However, with the pick-up in the manufacturing sector and in overall spending helped the economy to recover with the GDP growing 7.2 per cent in the quarter ending December 2017. 

The semi-urban and rural regions growing preference for scooters as well as for motorcycles stimulated the recovery and boosted the growth of two-wheelers.

Infrastructure development, streamlining of the logistics & e-commerce sectors post GST, restrictions on truck overloading and stimulus to replacement buying have provided the much needed boost to the growth of M&HCV segment. LCV market also acquired double digit growth propelled by two years of consecutive good monsoons which resulted in better crop yield and placed more disposable income in the hands of rural populace.

Passenger vehicles stayed in course and grew moderately by 7.77 per cent in domestic market, while the exports de-grew marginally by 1.0 per cent during the month. 

Car market leader, Maruti Suzuki India Ltd led the charge selling a total of 148,438 vehicles in February 2018, including 11,790 units of exports, as against a year-ago sales figure of 130,101 vehicles, which translates into a growth of 14.1 per cent. Domestic sales at 136,648 units were up 13.3 per cent, while exports at 11,790 units surged 24.1per cent y-o-y. 

Sales of mini segment cars, including Alto and Wagon R, witnessed a 2.1 per cent uptick to 33,789 units during February 2018 against 33,079 units in February 2017. The compact segment of MSIL featuring offerings like Swift, Ignis, Celerio, Baleno, Dzire, Tour S posted a growth of 38.7 per cent during the month. The Company’s mid-sized sedan Ciaz continued to head southwards to 16.8 per cent selling 4,897 units (February 2017: 5,886 units) in February 2018.

Sales of Maruti’s utility vehicles, including Gypsy, Grand Vitara, Ertiga, S-Cross and compact SUV Vitara Brezza increased by 13.8 per cent to 20,324 units in February 2018, from 17,863 units in the same month of 2017.

Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer and the largest passenger car exporter achieved total sales for February 2018 stood at 55,422 units as against 52,734 units in February 2017 rising 5.1 per cent y-o-y. The domestic sales accounted for 44,505 units as against 42,327 units in February 2017, while the exports grew by 4.9 per cent from 10,407 vehicles a year ago to 10,917 units in February 2018.

Toyota Kirloskar Motor (TKM) sold a total of 12,729 units in the month of February 2018. TKM sold 11,864 units in the domestic market & exported 841 units of the Etios series. The company sold a total of 11,543 units in the domestic market and exported 570 units of the Etios series in February 2017.

Commenting on the sales performance, N Raja, Dy MD, TKM said, “We are happy that we have been able to sustain the positive growth trend registering a 3per cent growth in February. We have started the year 2018 on a positive note with a cumulative growth of 11per cent in the first two months of Jan – Feb 2018.

The National Auto Policy Draft has been very encouraging with a clear focus and push towards ‘technology agnostic’ green mobility roadmap. We are optimistic that such measures to promote cleaner and greener technologies will further promote the Hybrid technology and rationalize the GST structure for automobiles.”

Domestic sale of both Nissan India and Renault India headed southward selling 4,738 units (February 2017: 4,807 units) and 7,305 units (February 2017: 11,198 units) respectively during the month. 

Ford India’s total sales in February stood at 23,965 vehicles as compared to 24,026 vehicles in the same month last year.

The company’s sale in India grew by 8.4per cent to 9,041 vehicles in February from 8,338 vehicles in the same month last year. Exports were at 14,924 units compared to 15,688 vehicles in February 2017.

“Improvements in GDP growth and other industry indicators continue to support the year on year growth of the auto industry,” said Anurag Mehrotra, President  & MD, Ford India. “However, there are headwinds in terms of impending increase in interest rates, crude prices, and inflation. We also believe the increase in customs duty and the cess of exports will drive up prices, with a potential of impacting demand.”

Tata Motors’ sales (including exports) of commercial and passenger vehicles in February 2018 stood at 63,761 units, a 34.0 per cent increase y-o-y. The domestic sales of Tata commercial and passenger vehicles at 58,993 units in February 2018 were up 38.2 per cent over 42,679 units sold a year ago.

Tata Motors’ PVBU reported a total sales volume of 20,022 units in domestic market during February 2018, a 43.5 per cent increase compared to 13,957 units in February previous year, due to the increasing demand of Tiago and Tigor along with Nexon and Hexa gaining traction in the steadily growing UV Segment. The Passenger Car segment registered a strong growth of 17.0 per cent while the UV segment grew by 165.0 per cent clearly showing a trend of growing customer base across segments. Cumulative sales growth of Passenger Vehicles in the domestic market (April 2017-February 2018) was at 167,055 units compared to 137,718 units, a growth of 21 per cent over last year. TML’s exports totaling 342 units in February 2018 were down by 97.7 per cent y-o-y.     

The company’s sales of commercial vehicles in February 2018 in the domestic market aggregated 38,971 units, a 35.7 per cent growth compared to 28,722 vehicles sold in February last year. The growth accrued on the back of robust infrastructural developments, fresh tenders in car carriers, coal movement and the petroleum sector. The growth was also bolstered by increasing demand from construction, growing logistics, e-commerce and FMCG applications. 

Tata LCV sales grew by a healthy 46.3per cent to 20,027 units during February 2018 aided by an increased thrust in Agriculture based, FMCG and E-commerce sectors. Increasing demand for container and refrigerated trucks also led to this growth. While M&HCV sales added up to 18,944 units, a decent 26 per cent growth over February 2017. 

Mahindra & Mahindra continued on a high growth trajectory. M&M’s utility vehicle sales in domestic market clocked 7.4per cent uptick to 20,977 units from 19,529 units a year ago. The company’s domestic CV sales at 20,946 units also saw a 27.9per cent growth y-o-y.  In 3-wheeler segment too, the company witnessed an impressive growth of 50 per cent to 5,138 units from 3,426 units in February 2017.

In tune with the growth witnessed in CV market, Ashok Leyland clocked a uptick of 30per cent with domestic sales of 17,213 units during the month.

VE Commercial Vehicles Ltd (A Volvo Group and Eicher Motors joint venture) sold 6,796 units in February 2018 as compared to 5,379 units February 2017, recording a growth of 26.3 per cent. This included 1,013 units of exports during the month which had increased by a whopping 83.8 per cent. 

Hero Motocorp, the world’s largest two-wheeler manufacturer notched up a decent 18.2 per cent growth, selling 605,355 units in the domestic market in February 2018 against 511,954 units sold in February2017. The company’s exports aggregating 24,242 units were also on the fast track, clocking a 92.1per cent growth y-o-y.

Bajaj Auto Ltd’s domestic two-wheeler sales volume of 175,489 units in February 2018 grew by 23.3 per cent from 142,287 units in February 2017.  Bajaj two-wheeler exports at 122,025 units were up 18.9per cent y-o-y. 

Buoyed by a robust increase in scooter and motorcycle sales, TVS Motor Company registered significant growth of 36.9 per cent in February 2018, clocking total two wheeler sales of 280,942 units against 205,199 units a year ago. Domestic sales of TVS Two-Wheelers rose 33.5 per cent to 230,353 units in February 2018 from 172,611 units in February 2017. 

TVS exports recorded a staggering growth of 55.2 per cent with exports of 50,589 two wheelers in February 2018 vis-à-vis the export figure of 32,588 two-wheelers a year ago.

Honda Motorcycle & Scooter India (HMSI) continued to move up the growth curve with its domestic sales of two-wheelers rising by 32.3 per cent to 489,638 units and exports by 28.2per cent to 30,144 units in February 2018.

Royal Enfield clocked 71,354 units of motorcycle in domestic sales in February 2018 compared to 56,737 units of motorcycle sold in February 2017 a rise of 25.8 per cent. The company’s export also grew marginally by 1.2 percent to 1,723 units (February 2017: 1,702 units).

Suzuki Motorcycle India has clocked 46,147 units in domestic sales; and 5,684 units in exports; taking the overall tally for the month to 51,831 units. This performance represents a domestic Y-O-Y growth of 37.2per cent; and an overall growth of 28.7per cent. 

Sajeev Rajasekharan, EVP, Sale & Mktg, Suzuki Motorcycle India, said, “The year 2018 has proved to be a very successful year for Suzuki Motorcycle India as we have surpassed the 5 lakh unit sales milestone. Backed by a robust product portfolio that is leveraging from the paradigm shift in customer preference towards premium motorcycles and premium scooters, we are now geared up towards ending the financial year on a strong-note, and build on this foundation for future-growth.”

The good thing is that the Indian economy is expected to grow at 7.3 per cent in the next fiscal driven by private consumption, increased investment in infrastructure, waning of the disruptions caused by GST rollout and exports. With the economy on a growth trajectory, the auto market is poised for a decent growth in the short and medium terms. The industry and, manufacturing sector in particular, have been consistently doing well for the last few months, which augur well for overall auto market.

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