Auto Market Stays on Course

Auto Market Stays on Course

Auto market's excellent run continued in December 2009. The month saw domestic sales crossing one-million mark shrugging off the year-end blues. December normally witnesses lull in auto market, as the customers postpone their purchases for the next year model and manufacturers shut down their plants for maintenance.

The robust 67.5% growth in vehicle sales in domestic market was helped by the low base of the previous year when the market was in turmoil following the financial meltdown giving rise to the uncertainty and tightening of lending norms by the financiers. With economy emerging from the slowdown mode and consumer confidence returning, the auto market made most of the pent-up demand, riding on the liberal monetary policy & low interest regime, continuing fiscal stimuli, attractive discounts on offer, cash infusion from Sixth Pay Commission, record number of new launches and buzz created by the Auto Expo.

The fact that industrial output grew by a handsome 11.7% in November and economic revival is getting firm and taking root found reflection in the resurgent domestic CV sales that grew by a whopping 171.6% to 48,614 units in December 2009. The CV segment was the worst affected by the downturn in the latter half of the year 2008 as the market witnessed a sharp 58.3% decline to 17,920 units in December 2008 from 42,961units in December 2007.

Passenger vehicles stayed in the fast lane and grew by a healthy 50% in domestic market, so were the exports that posted a 40.4% growth during the month, thanks to the continuing buoyant performance of Maruti Suzuki India and Hyundai Motor India in export of small cars from India.

The buoyancy was all pervasive. While total two-wheeler domestic sales were up 66.6% to 7.68 lakh units and two-wheeler exports grew by 25.6% to 1.13 lakh units, 3-wheeler domestic sales zoomed by 83.7% and exports by 10.8% during the month.

Car market leader Maruti Suzuki India Limited led the charge selling a total of 84,804 vehicles in December 2009, including 13,804 units of exports, as against a year-ago sales figure of 56,293 vehicles, which translates into a growth of 51 %. Domestic sales at 71,000 units were up 37%, while exports at 13,804 units surged 224% y-o-y.

Hyundai Motor India Ltd, the country's second largest car manufacturer and the largest passenger car exporter ended the year on a high note with its domestic sales at 22,252 units growing by a healthy 42.6% y-o-y. The company's exports too reversed the declining trend, ending up with a growth of 9% y-o-y during the month.

HMIL's total sales in December 2009 stood at 47,217 units as against 38,502 units in December 2008 rising 22.6% y-o-y. The domestic sales accounted for 22,252 units as against 15,602 units in December 2008, while the exports grew from 22,900 a year ago to 24,965 units in December 2009.

In calendar year 2009 (Jan-Dec), HMIL grew by 14.4% registering total sales of 559,880 units vis-à-vis cumulative sales tally of 489,343 units in 2008 with domestic sales accounting for 289,863 units (18.1% growth over 2008). HMIL's overseas sales totalled 270,017 units rising by 10.7% during the calendar year.

Commenting on HMIL's performance Arvind Saxena, Director - Mktg and Sales, HMIL commented, "With the overall economic scenario improving the Indian automotive market seems to have stabilised but we must thank the Indian government for the timely intervention last year. The stimulus package certainly helped the automotive industry and we hope the government will continue with this at least for some more time. For HMIL particularly, introduction of new products like the i20 helped as in the last few months it has become an important contributor to our sales."

The segment-wise total sales of HMIL in the month of December 2009 were as follows: A2 Segment (Santro, i1 0, Getz & i20) - 44,129 units; A3 Segment (Accent & Verna) -3,068 units; and A5 Segment (Sonata Transform) - 20 units.

General Motors India (GMI) clocked a record 104% growth in its domestic sales at 8,226 units in December 2009 over 4,041 units sold in December 2008. GM India's December'09 sale comprised of 4,147 units of the Chevrolet Spark, 1,519 units of the Chevrolet Tavera, 616 units of the Cruze, 493 units of Aveo U-Va, 374 Units of Aveo, 168 units of Chevrolet Optra, 859 units of Chevrolet Beat and 82 units of the Chevrolet Captiva.

Tata Motors' sales (including exports) of commercial and passenger vehicles in December 2009 stood at 51,627 units, a 106% increase y-o-y. The domestic sales of Tata commercial and passenger vehicles at 48,173 units in December 2009 were up 103% over 23,742 units sold a year ago.

The company's sales of commercial vehicles in December 2009 in the domestic market aggregated 33,387 units, the highest since March 2008 and a 140% growth compared to 13,904 vehicles sold in December last year. While Tata LCV sales grew by a healthy 97% to 18,217 units during December 2009, M&HCV sales added up to 15,302 units, a staggering 218% growth over December 2008 and the highest since March 2008. The company attributed the healthy growth numbers to the low base of the previous year.

Passenger Vehicles Business Unit of Tata Motors reported a total sales volume of 14,786 units in the domestic market during December 2009, a 50.3% increase compared to 9,838 units in December previous year. Passenger car sales (comprising Indica range, Indigo range and Nano) at 12,944 units grew by 54% over December 2008 with Tata Nano accounting for 3,610 units and the Indica range - 4,228 units. The Indigo range recorded sales of 5,106 units, a growth of 205% y-o-y, on the back of the continued enthusiastic response to the newly launched Manza in the market. The Sumo/ Safari range accounted for sales of 1,710 units, growing by 21 % and recording the highest retails this fiscal. TML's exports totalling 3,454 units in December 2009 were up 161 % y-o-y.

Mahindra & Mahindra Limited continued on a high growth trajectory. M&M's utility vehicle sales in domestic market soared 119% to 11,872 units from 5,415 units a year ago. The company's domestic CV sales at 7,665 units also saw a whopping 191 % growth y-o-y. In 3-wheeler segment too, the company witnessed an impressive growth of 50% to 2,909 units from 1,934 units in December 2008.

In tune with the revival and buoyancy witnessed in CV market, Ashok Leyland Limited clocked a staggering growth of 295% with domestic sales of 5,536 units during the month.

Hero Honda Motors Limited (HHML), the world's largest two-wheeler manufacturer notched up a staggering 76% growth, selling 368,001 units in the domestic market in December 2009 against 209,156 units sold in December 2008. The company's exports aggregating 23,281 units were also on the fast track, clocking a 26% growth y-o-y.

Resurgent Bajaj Auto Limited once again came up with a spectacular sales performance. The company's domestic two-wheeler sales volume of 146,407 units in December 2009 grew by 136% from 62,043 units in December 2008. Bajaj two-wheeler exports at 74,022 units were up 29.5% y-o-y in keeping with its past performance.

Buoyed by a robust increase in scooter and motorcycle sales, TVS Motor Company registered significant growth of 34% in December 2009, clocking total two wheeler sales of 1,19,701 units against 89,285 units a year ago. Domestic sales of TVS Two-Wheelers rose 42% to 102,479 units in December 2009 from 72,355 units in December 2008.

Showing signs of recovery, TVS exports recorded a marginal growth of 1.7% with exports of 17,222 two wheelers in December 2009 vis-à-vis the export figure of 16,930 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 26.5% to 110,289 units and exports by 10.4% to 7,472 units in December 2009.

The impressive growth numbers have essentially been attained on the back of low base of previous year and stimulus packages rolled out by the Government. With commodity prices moving up and impending introduction of new emission norms, vehicle prices are likely to go up, especially if the Government withdraws the stimulus package, which may dampen the upbeat mood in auto market.

However, since the economy is on a firm footing now, shrugging off the uncertainty, the auto market is poised for a decent growth in the short and medium terms. The good thing is that the industry and, manufacturing sector in particular, have been consistently doing well for the last few months, which portends well for commercial vehicles and overall auto market.