Auto Market Changes Gears Indian auto sector kept pace with the Indian economy growing at 7.9 per cent in the second quarter by maintaining strong sales during the month of Nov'09. The low base of the corresponding month of previous year when the global markets were in turmoil in the aftermath of financial meltdown, aided by a slew of new models & variants, year-end discounts and improving consumer sentiment led the domestic auto market to record a robust growth of 46% during the month of Nov'09. Vehicle exports also stayed on track rising by decent 25% during the month, even as the feeble recovery of world economy showed signs of stabilizing for the better. This apart, continuing soft interest rates that peaked in October last year, have also helped revive vehicle sales in the past one year. Commercial vehicles that had turned positive in August after having been in the negative territory for over a year sustained the growth tempo clocking a whopping 98% growth in sales at 40,847 units in domestic market during the month. CV exports aggregating 4,845 units also grew by healthy 77% y-o-y in Nov'09. This augurs well for the auto market. With industrial production picking up and growing by over 8%, CVs are expected to remain on a growth trajectory for the remainder of the year with their strong linkage and correlation with the economic and industrial growth. Passenger vehicle domestic sales, including cars & UVs, totaling 166,653 units, as also exports at 40,265 units thanks to a large chunk contributed by small cars from Maruti Suzuki and Hyundai Motor India, continued their excellent run during the month. While domestic sales of passenger vehicles soared 67%, exports recorded a respectable growth of 16% in Nov'09 in spite of termination of scrappage incentive programme by European countries. With confidence and buzz returning at the markets, 2 & 3-wheelers also continued to move up the growth curve. 2 & 3-wheeler sales (domestic + exports) climbed up steeply by 39% and 37%, respectively. What is noteworthy is that the buoyancy was witnessed across various segments of the industry, which indicates that the turnaround is not a flash in the pan and is taking strong roots. Car market leader Maruti Suzuki India Limited sold a total of 87,807 vehicles, including 11,448 units of exports, in Nov'09. This translates into a staggering 66.6% growth over the corresponding sales figure of 52,711 units in Nov'08. Domestic sales at 76,359 units were up 60.1 % over 47,704 units sold a year ago, while exports at 11,448 units surged 128.6% y-o-y. The impressive domestic sales volumes of MSIL were contributed by A2 and A3 segments, which includes company's hot selling models such as Alto, Wagon-R, Estilo, Ritz, Swift, A-Star, D'Zire and SX4. The company attributed the exceptional performance during the month, among other factors, to the low base of Nov'08 when the sales plummeted as a result of the economic slowdown and consequent crisis of confidence. Compared to Nov'07 (65,216 units), Maruti Suzuki's domestic sales grew by 17.1 per cent. Similarly, for the period Apr-Nov'09 (vis-à-vis Apr-Nov'07 - 466,232 units), the domestic sales growth translates into 18.9 per cent. Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest car exporter, saw its cumulative sales increasing by a healthy 28% to 55,265 units in Nov'09 from 43,102 units during the same month in 2008. While HMIL's domestic sales grew by whopping 93%, the exports reflecting a declining trend were down by 4.9% y-o-y. Commenting on Nov'09 sales, Arvind Saxena, Sr Vice President - Mktg & sales), HMIL, said, "The overall economic scenario has been positive and this has translated into more footfalls in the showrooms and higher automobile sales as indicated by this month's figures. We hope the economy will continue on a growth trajectory as it will help the Indian automotive industry to maintain a double-digit growth figure." The segment-wise cumulative sales of HMIL in Nov'09 were: A2 Segment (Santro, i10, Getz & i20) - 50,501 units; A3 Segment (Accent & Verna) - 4,748 units; A5 Segment (Sonata Transform) - 15 units; and SUV Segment (Tucson) - 1 unit. General Motors India (GMI) witnessed a record 65% rise in its sales to 7,118 units in Nov'09 against 4,307 units in Nov'08. GM India's Nov'09 sales comprised of 4,202 units of the Chevrolet Spark, 1,264 units of the Chevrolet Tavera, 524 units of Aveo U-Va, 412 Units of Aveo, 518 units of Chevrolet Cruze, 114 Units of Chevrolet Optra and 84 units of the Chevrolet Captiva. Tata Motors' sales (including exports) of commercial and passenger vehicles in Nov'09 added up to 54,114 units, a 65.5% increase over 32,696 units sold in Nov'08. The domestic sales volumes of Tata commercial and passenger vehicles for Nov'09 stood at 50,114 units, up 64% over 30,556 units sold a year ago. Tata commercial vehicles clocked 29,248 units of sales in domestic market during Nov'09, which translates into a massive 83.3% growth compared to the domestic sales figure of 15,957 units a year ago. Sales of Tata cars, at 18,480 units were the highest this fiscal, and grew by 48% y-o-y. While Tata Nano sales were 3,406 units, the Indica sales remained flat at 9,111 units compared to November last year. The Indigo range recorded its highest ever sales of 5,963 units, a growth of 71.5%. The Sumo/Safari range accounted for sales of 2,226 units, up 23% y-o-y. TML's exports at 4,000 vehicles (2,140 vehicles) in Nov'09 registered a growth of 87%. Mahindra & Mahindra also came up with an impressive performance clocking a 109.4% growth in its total sales at 22,310 units in Nov'09 as compared to 10,655 units in Nov'08. M&M's utility vehicle sales in domestic market zoomed to 10,738 units from 5,101 units a year ago, recording a whopping 110.5% rise y-o-y. Mahindra 3-wheeler domestic sales also surged by 78.7% to 4,118 units in Nov'09 from the sales tally of 2,305 units a year back. The company's domestic sales of commercial vehicles stayed on a high-growth path with sales figure of 6,252 units (2,724 units) during the month, which works out to an impressive growth of 129.5%. Ashok Leyland also consolidated its position recording a staggering 137% growth in its domestic sales at 4,237 units during the month. In line with the sales trends in other segments, two-wheeler sales also went into overdrive with all two-wheeler majors witnessing robust sales volumes and growth during the month of November 2009. Hero Honda Motors Limited (HHML), the world's largest two-wheeler manufacturer was in a fast-forward mode, selling 373,183 two-wheelers in the domestic market during Nov'09, a robust growth of 33% over the domestic sales figure of 281,659 two-wheelers in Nov'08. The company's exports at 8,195 units also stayed on course with a year-on-year growth of 5.5%. Bajaj Auto Limited sustained the momentum of increasing sales volumes. Riding on the growing popularity of its 'bigger and sportier' Discover (94,265 units) and Pulsar (50,153 units) brands, Bajaj motorcycle sales (including exports) grew by 84% to 242,648 units in Nov'09. While the domestic sales of Bajaj two-wheelers at 162,927 units recorded a quantum jump of 96.5%, while two-wheeler exports at 79,721 units vroomed by 61%. Addition of a new sub-150cc Pulsar in Bajaj Auto's line-up of two-wheelers is expected to spur the growth momentum further from Jan'10. Exports at 98,521 units (2 & 3-wheelers) in Nov'09 were the highest ever for Bajaj. TVS Motor, the third largest two-wheeler player also came up with a spectacular showing selling 106,836 two-wheelers in Nov'09 in the domestic market, which reflects a 37.9% rise y-o-y. The company's exports of two-wheelers continued to witness a slide, declining by 33% to 14,008 units during the month from the export figure of 20,911 a year ago. Honda Motorcycle & Scooter India (HMSI) was steady as ever. HMSI notched up total sales figure of 113,278 two-wheelers (including exports) in Nov'09 as against 100,143 two wheelers in the same month previous year. While domestic sales at 104,822 units grew by 11.3%, exports at 8,456 units were up 42.8%. Some of the operators are preponing their purchases due to lurking fear of increase in vehicle prices arising out of the possible withdrawal of stimulus packages - a combination of excise cuts and accelerated depreciation benefits - by the Government, upward trend in raw material prices and cost increase due to introduction of new emission norms from 01.04.2010. However, with industrial production picking up and consistently clocking over 8% of late, as also the business confidence improving, the scenario is expected to be buoyant for some time to come.