Fizz Missing in Auto Market

Although the sales numbers for the month of September 2008 look decent overall, the performance of various segments save two-wheelers is not something to rave about. While passenger vehicles and 2/3-wheelers stayed on course as the cumulative segmentwise sales figures suggest, it is only few select companies and models across the spectrum, which propelled the ultimate growth rates. Chiefly, i10, Swift and Scorpio shored up the domestic growth rate of 5.3% for passenger vehicle segment. And Hero Honda, continuing its spectacular performance in the current financial year and clocking a robust growth of 22.2%, boosted the numbers for two-wheelers that finished with a growth of 14.5% in domestic market during the month of September. That the growth rate of two-wheelers during the month looks healthier than the market sentiment suggests was partly aided by the low base effect.

Car market leader, Maruti Suzuki India recorded a paltry growth of 2.5%, thanks to the continuing strong demand for Swift Dzire in the domestic market. The company's domestic sales tally in September 2008 read 64,682 units as against 63,086 units a year ago. MSIL, however, came up with strong export performance clocking 6,318 units during the month, which translated into a hefty 44.8% growth over 4,362 units exported in the same month last year. Cumulative sales (domestic + exports) of the company at 71,000 units grew by 5.3% y-o-y.

Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, reported a cumulative sales growth of 68% for the month of September 2008.

HMIL's total sales during in the month of September 2008 stood at 46,222 units as compared to 27,517 units in September last year. The company witnessed domestic sales of 22,311 units (18,009 units) growing by healthy 24% y-o-y, while its exports aggregating 23,911 units (9,508 units) rose by a whopping 151.6% during the month.

Commenting on the sales, Arvind Saxena, Sr. VP - Marketing & Sales, HMIL said, "The upward trend of the sales figure shows that we have received a phenomenal response from the customers on the 10th Anniversary celebration. With the onset of the festive season, we are optimistic that we will be able to keep the momentum going in the coming months. To meet the soaring demand of i10 in domestic and overseas market, we have started the third shift operations in our second plant in mid September this year, which was originally scheduled for early October 2008."

The segment-wise cumulative sales of HMIL in September 2008 were as follows: A2 Segment (Santro, i10, Getz Prime) - 39,899 units; A3 Segment (Accent, Verna) - 6,305 units; A5 Segment (Sonata Embera) - 14 units; and SUV Segment (Tucson) - 4 units.

 
With the third generation Honda City due to hit the India market only in November 2008, Honda Siel Cars India continued to perform below par. The company posting sales of 3,104 units witnessed a steep fall of 45% in its sales during the month of September 2008 vis-à-vis the sales figure of 5,674 units a year ago.

General Motors India was in the negative terrain by as much as 10.4%. The company could muster sales of 5,154 units in September 2008 as against 5,751 units in September 2007.

Ford India could not stem its slide. The company's domestic sales at 2,273 units plunged 36% during the month.

Bucking the trends, Mahindra & Mahindra came up trumps with a 28% rise in domestic sales of its utility vehicles at 10,628 units in September 2008. The company also recorded healthy growth in CV and 3-wheeler sales during the month. While its commercial vehicle sales in domestic market adding up to 6,161 units (4,881 units) surged by 26.2%, 3-wheeler sales at 5,940 units (3,208 units) zoomed by 38.7% y-o-y in September 2008. However, Logan continued to see its sales curve going down. Logan's sales at 1,752 units (2,184 units) during the month plummeted by 20%.

Tata Motors reported sales of 49,647 vehicles (including exports) during September 2008, an increase of 3% compared to 48,347 vehicles sold in September last year. Cumulative sales for the company y-t-d at 2,65,685 units, have grown by 1 %.

With domestic sales volumes of 16,586 units, Passenger Vehicle Business Unit of Tata Motors witnessed a 2.5% drop compared to the sales figure of September last year. The Indica family sales stood at 8,598 units. The company attributed the lower than the expected sales to the ramp-up constraint of production of the new Indica Vista launched a month earlier. As a result, the range plunged 24% y-o-y. The Indica Vista is currently on a waiting list of 4-6 weeks and the company is taking all steps to ramp up production speedily. The Indigo family, however, stayed on course with sales of 4,667 units, a 100.5% growth over September 2007. The Sumo and Safari accounted for sales of 3,321 units, growing by measly 1%.

Cumulative sales of Tata passenger vehicles in the domestic market for the fiscal in the first six months have aggregated 97,905 units, representing a 4.5% decline y-o-y. Cumulative sales of the Indica at 49,555 units are down 27.6%. However, the company anticipates the reversal of trend in the second half of the fiscal due to higher volumes that the new Indica Vista is expected to contribute.

The company's sales of commercial vehicles in September 2008 in the domestic market totalled 28,648 units, up 6% over 27,036 vehicles sold in September 2007. LCV sales at 15,927 units rose by 23%, while M&HCVs managing sales of 12,721 units dropped by 10%.

Tata Motors' exports tally at 4,413 vehicles in September 2008 grew by 3% compared to the export figure 4,305 vehicles in September 2007. The cumulative exports y-t-d during the current the fiscal at 22,040 units have declined by 20% from 27,602 units in the corresponding period last year.

Rival, Ashok Leyland was also scarred by the slowdown with domestic sales at 5,454 units tumbling 19.3% during the month of September 2008. The export numbers made up partly for the steep fall in domestic sales, the cumulative sales during the month slipping by 14.6%.

Two-wheelers fared better than the other segments, thanks largely to the base effect and the spectacular showing of Hero Honda that piled up massive 377,133 units of domestic sales during the month of September 2008. The company has been growing at scorching pace of 20% in the current fiscal, the month of September 2008 accounting for over 22% rise.

Riding on its robust exports, Bajaj Auto notched up a 6% rise in its cumulative sales of two-wheelers at 218,494 units in September 2008 as against 206,208 units a year ago. However, the company lost ground in the domestic turf and slipped by 3.5%. Exports at 55,447 units and accounting for almost one-fourth of total sales of Bajaj two-wheelers soared by 48.7%.

Bajaj 125cc DTS-Si platform consisting of the XCD 125 DTS-Si and the Platina 125 DTS-Si clocked 39,955 units with the Platina 125 DTS-Si contributing 11,991 units in its first month of launch Bajaj expects the combined sales from this platform to grow to 60,000 units/month with the launch of the third new motorcycle off this platform in December 2008. Bajaj is targeting 50% market share in the 125cc+ motorcycle segment.

TVS Motor Company posted 19% growth clocking total two-wheeler sales of 137,246 units in September 2008 as against 115,091 units in the corresponding month of the previous year.

TVS motorcycle sales were up 32% at 71,278 units over 53,991 units recorded in September 2007. The company's scooter sales were, however, flat at 27,108 units as against 27,199 units a year ago.

TVS two-wheeler exports continued their upward growth trend, vrooming by 40% to 18,229 units in September 2008 from 13,036 units in September 2007.

The global economic Tsunami has taken its toll, leading to confidence crisis in the Indian financial market. With Sensex taking severe beating and banks becoming extra cautious in lending, the auto market is in for a roller-coaster ride.