Auto Sales in April Remains Buoyant

The advent of new financial year has been enthusing for the auto market with sales maintaining steady growth momentum in April 2018 albeit over low base in the same month last financial year. The various macroeconomic factors like investment in infrastructure development, improved industrial activities, and robust demand in private consumption-led sectors are all boosting the economy thereby leading to continuing demand.

The improvement in consumer sentiment in anticipation of a good monsoon for a third consecutive year, with Interest rates and inflation under control have been some of the other major reasons for boosting the Passenger Vehicle segment especially the UV sales in semi urban and rural markets. With impending advent of three new car manufacturers to India – Kia, MG Motors and Peugeot, there will be added competition in the premium hatchbacks, crossover compact SUVs and premium compact SUV segments in times to come.

Passenger vehicle segment clocked a growth of 7.50% y-o-y in domestic sales at 298,504 units during the month of April 2018. Domestic sales of cars grew by 4.90% to 200,183 units and UV segment recorded a healthy 11.92% increase at 79,136 units during the month.  The exports that helped to boost the sales volumes of passenger vehicles in the earlier months declined sharply by 15.89% y-o-y to 50,921 units from 60,538 units a year ago. This is the first decline in PVs exports in a decade caused primarily due to delay in GST refunds, prioritisation by some OEMs of domestic market over international market and shifting small car production out of India. 

Commercial vehicles, a barometer of economic activity, stayed on course to witness a robust 75.95% growth in domestic sales that numbered 72,993 units.  Domestic sales numbers of CVs were shored up by M&HCVs & LCVs robust growth of 169.26% and 43.92% respectively; and contributed 28,547 units and 44,446 units respectively to the domestic sales tally of CVs in April 2018.

Two-wheelers continued their excellent run, with their domestic sales growing steadily by 16.92% y-o-y to 1,958,241 units during the month of April’18. Two-wheeler exports also stayed on growth trajectory, climbing up by 26.85% to 293,857 units during the month.

Three-wheeler sales in domestic market also remained positive, gaining by 54.17% to 49,980 units. Even exports accrued a healthy growth of 88.16% at 49,717 units, with total sales of 3-wheelers (including domestic sales & exports) growing by 69.43% during the month.

The country’s largest car maker Maruti Suzuki India Limited (MSIL), saw its domestic sales volumes grow by 13.4% to 163,434 units during April’18. Significantly, growth came in not from the company’s traditional bread and-butter small-car segment, but from premium hatchback Swift, Ignis, Celerio, Baleno, Tour S and DZire. While sales for entry-level cars Alto and WagonR fell by  2.8% to 37,794 units, off-take of Compact segment went up by 31.8% to 83,834 units. Sales in the Mid-Size segment (Ciaz), too went down by 27.2% to 5,116 units.

In keeping with the trend, Korean auto major Hyundai Motor India Ltd (HMIL), recorded sales growth number in the domestic market at 46,735 units in April 2018, which translated into a 4.4% growth y-o-y. Commenting on the April sales, Rakesh Srivastava, Director - Sales and Marketing, HMIL said, “Hyundai did overall volume growth of 4.4% with a positive start in domestic market with a volume of 46,735 units on the strong performance of Power Brands- GRAND i10, ELITE i20, Next Gen VERNA & CRETA contributing 79% of the total sales volume under the Modern Premium Brand Direction with Best After Sales Service.”  

The company’s exports also increased by a massive 12.0% to 13,009 units from 11,610 units a year earlier. The segment-wise cumulative sales of HMIL for April 2018 were: Mini segment (Eon, Santro) – 4,663 units; Compact Segment (i10, i20, Getz, Grand i10, Xcent, Elite i20) – 28, 255 units; Mid Size (Verna) – 4,077 units; Executive (Elantra)- 150 units; UV 1 (Creta) – 9,390 units; and UV 4 (Santa Fe, Tucson) - 200 units.

Honda Cars India, registered monthly domestic sales of 9,143 units in April 2018 against 14,480 units achieved during the same month last year, de-growth of 36.9%. However, the company’s export grew marginally by 3.2% at 452 units.

Rajesh Goel, SVP and Director, Sales & Marketing, Honda Cars India Ltd, said “HCIL sales in April are as per plan. We are preparing for the launch of All New Amaze this month and did not have stocks of outgoing Amaze. Besides, City and WR-V which were launched last year had witnessed new model sales spurt around this time. Both these reasons are reflected in lower wholesales in April this year as compared to last year. It’s a temporary phenomenon. There is a very strong interest from the market for the All New Amaze and we are confident that overall sales will be robust after the introduction of new model.”

Ford India’s performance in the domestic market was in negative terrain at 2.5% selling 7,428 units against 7,618 units y-o-y.

Commenting on the company's performance, Anurag Mehrotra, President and Managing Director, Ford India, said, "Increasing inflation trajectory which might weigh on customer's access and cost to credit, coupled with increasing crude prices could lead to passenger vehicle industry growing at low single digits - so far this year". 

"At Ford, we continue to execute our strategy of building a strong brand, introduce right products, ensure competitive costs and effective scale. In late April the company launched its first crossover vehicle in India, the Ford Freestyle. However, the impact of the Freestyle entry on the company sales performance can only be assessed in May sales numbers", added Mehrotra.

Toyota Kirloskar Motor (TKM) registered a nominal sales growth by 0.6% per cent to 13,037 units from 12,964 units in April last year. On the export front sales headed south, slipping by 25.6% to 834 units during the month.

Passenger vehicle business unit of Tata Motors reported the domestic sales in April 2018 sales at 19,157 units as against 14,066 units, a strong growth of 36.2% over last year. Tiago continued its strong growth momentum in the passenger cars segment and the strong demand of Nexon resulted in 3X growth of the UV segment. On the export front as well Tata Motors achieved a decent growth of 6.2%

Mahindra & Mahindra Ltd (M&M) reported a 13.3% rise in its auto sales numbers, which stood at 21,395 units during April 2018 as against 18,884 units during April 2017.  The company’s domestic sales stood at 20,395 units during April 2018, as compared to 18,379 units in April 2017, an increase of 11.0%. The Passenger Vehicles segment (which includes the UVs and Verito) grew by 13.0%, selling 21,927 units in domestic market during April 2018.

Nissan Motor India (NMIPL) sold 3,526 units in April’18 compared to 4,217 units a year ago - a decline by 16.4%.  

M&HCVs segment of commercial vehicles continued to grow on a low base of last year at 144.15% at 31,354 units, aided by infrastructure development and opening up of the mining sector. The LCV segment grew 46.20% at 47,813 units due to new product launches, e-commerce and growing rural consumption. Farm loan waivers, rise in rural wages and increased Minimum Support Price (MSP) for crops also helped in augmenting sales.

The sales of Tata commercial vehicles in April 2018 in the domestic market aggregated 34,354 units, up 132.5%. While domestic sales of Tata LCVs numbering 17,784 units, surged by 75.6%, M&HCV sales expanded by 256.1% to 16,570 units during the month. In the international market, the company’s sale grew by 43.1% at 2,907 units.  

Mahindra & Mahindra Ltd (M&M) The 4-wheeler commercial segment which includes the passenger and load categories soared by 25.9% y-o-y to record 18,963 units of domestic sales in April 2018. Exports for the month have also grown by an impressive 110%.

Ashok Leyland another leading player in the commercial vehicle segment clocked a total sales (domestic + export) of 12,677 units during the month against 7,090 units during April’07 achieving a growth of 78.8%. In the domestic market, sales surged at 86.5% selling 11,951 units against 6,408 units in April’17. Exports by the company during the month achieved a decent upswing of 6.5%.

VE Commercial Vehicles not to be left behind sold 3,409 units in April 2018 against 2,590 units in April 2017, an increase of 31.6% in the Indian market. In the international market, the company sold 550 units gaining 10.2% increase YoY.

Two-wheeler market sustained growth momentum with all major players increasing their monthly sales volumes y-o-y.

There was no stopping for Hero MotoCorp that recorded a 15.7% growth y-o-y to clock 677,792 units of domestic sales in April. The company’s exports were also in fast lane, growing by 62.9% to 16,230 units during the month.

Honda Motorcycle & Scooter India (HMSI) further consolidated its position in Indian market with a growth of 15.2% in domestic sales of two-wheelers at 635,824 units.  The exports too headed north, gaining sharply by 70.4% at 46,077 units during April 2018 from 27,045 units a year back.

Bajaj Auto’s sales of two-wheelers at 200,742 units in domestic market vroomed by 24.0% y-o-y during the month.  The company’s exports of two-wheelers also posted a decent growth of 12.8% to 148,875 units in April 2018.

TVS Motor recorded a growth of 17.6% in domestic sales of its two-wheelers at 241,604 units during April 2018. The two-wheeler exports of the company gave a sterling performance of  26.7% growth to 48,789 units from 38,510 units a year ago.

The fast growing Suzuki Motorcycle India, Royal Enfield and Indian Yamaha Motors were in top gear posting growth of 33.6%, 26.7% and 6.5% respectively in their total sales.

The auto market is getting back to growth trajectory on the back of overall supportive environment. Economy is slated to do well, and with good monsoon predicated, the rural economy too is expected to do better in comparison to last year. Further, with new product launches planned in FY19, the market is all set to buzz with activity.

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