Aided by Low Base, Auto Sales Climb Up

Auto sales during the month of July clocked double-digit growth, thanks, among other factors, to the low base of the previous year. Domestic auto market has been witnessing gradual upturn in sales since the advent of current calendar year, helped by steady improvement in finance availability & softening of interest rates with the entry of public sector banks in auto finance market in a big way, attractive discounts offered by manufacturers, new vehicle launches and upgrades, economy showing a semblance of stability after shocks of financial meltdown leading to improvement in consumer sentiment, increased rural income due to higher support prices for farm products, farm loan waiver & National Rural Employment Guarantee Scheme, stimulus packages and effect of higher salary payouts to the Government employees arising out of implementation of recommendations of Sixth Pay Commission.

The total number of vehicles sold in the domestic market during July 2009 aggregated 941,118 units representing a growth of 20.8% over the same month last year. This significant uptick in domestic sales numbers was contributed by all segments of industry. Passenger vehicles and two- wheelers led the charge with robust growth of 29.2% and 20.1%, respectively. Commercial vehicles that had been witnessing unflattering sales numbers for the last 11 months came back to positive territory with a growth of 9.6% y-o-y in domestic market, albeit on the back of 28% rise in LCV sales, while 3-wheelers sustained momentum of the past few months to grow by 15.4%.

The country's largest carmaker, Maruti Suzuki India (MSIL) reported a 33% jump in sales to 78,074 units (including exports) during the month of July 2009, the company's domestic sales growing by 27.6%. The major contribution to the company's growth numbers came from new models such as A-Star and Ritz, along with Swift and WagonR in the hatchback segment. The domestic sales volume in sedan segment comprising of SX4 and Dzire vaulted 51.5% to 9,101 units in July. It is the highest ever A-3 segment sales for the company. However, sales of Maruti 800 slipped further by 43.5% to 2,796 units from 4,953 units a year ago.

Maruti's exports remained bullish on strong demand from Europe and surged 87% to 10,546 units in July. During the month, the company crossed the milestone of 50,000 export units for A-star, which was introduced internationally in January 2009. The major markets for this model in Europe include Germany, UK, France, Netherlands and Greece.

Hyundai Motor India Ltd (HMIL) - India's second largest car manufacturer and the largest passenger car exporter, bounced back strongly in the domestic market to clock an impressive growth of 54% y-o-y. The cumulative sales increased by 26%, while the exports growth was 6% as compared to July last year.

HMIL's total sales for July 2009 stood at 45,543 units as against 36,152 units in July 2008. Of this, the domestic sales accounted for 23,193 units (15,066 units) and the overseas sales grew to 22,350 units from 21,086 units in July 2008. The segmentwise cumulative sales of HMIL during the month read as follows: A2 Segment (Santro, i10, Getz & i20) - 41,779 units; A3 Segment (Accent & Verna) - 3720 units; A5 Segment (Sonata Transform) - 44 units; and SUV Segment (Tucson) - Nil.

 
Commenting on July 2009 sales, Arvind Saxena, Sr Vice President - Marketing and Sales, HMIL said, "It seems the market is stabilizing at this point and we hope to see both the export and the domestic market picking up in the coming months, especially with the festival season starting next month. A strong demand for the i20 has also helped HMIL maintain and grow its share in the domestic market."

Honda Siel Cars India (HSCI) reco rded 12% increase in its sales for the month of July 2009 with a tally of 4,857 units as against 4,337 units sold in July 2008. Modelwise break-up for the company's July 2009 sales is: City - 3,268 units; Jazz - 1,037 units; Civic - 299 units; Accord - 223 units; and CR-V - 30 units.

The company notched up y-t-d (April-July 2009) sales of 17,625 units compared with 16,412 units in the corresponding period last year, which translates into a growth of 7.4%.

Tata Motors' total sales (including exports) of commercial and passenger vehicles in July 2009 added up to 48,080 vehicles, a growth of 18% over 40,687 vehicles sold in July 2008. Domestic sales volume of Tata commercial and passenger vehicles for July 2009 stood at 45,599 units, a 23% growth over 37,038 units sold in July last year. Cumulative y-t-d sales (including exports) of the company during the current fiscal at 171,168 units are lower by 1%, compared to 172,462 units for the same period last year.

Tata Motors sold 28,408 commercial vehicles in July 2009 in the domestic market - up 27% over the previous corresponding sales tally of 22,381 CVs. LCV sales were 17,750 units, rising by 44% over the corresponding sales figure for July last year. M&HCV sales stood at 10,658 units - the highest since September 2008 - turning positive after almost a year with a growth of 6% y-o-y.

Passenger Vehicle Business Unit of Tata Motors reported a total sale of 17,356 units in domestic market during July 2009, a 16.4% increase compared to 14,912 units sold a year ago. Despatches of the Tata Nano began during the month and counted 2,475 units. The Indica range sales stood at 8,563 units, up 14% y-o-y. The Indigo range recorded sales of 3,499 units, witnessing a 22% drop. The UV/SUV range of Sumo/Safari accounted for sales of 2,638 units, ending up flat compared to July last year.

The company began the sale and deliveries of the Jaguar and Land Rover range through the brands' flagship store in Mumbai. The response has been quite encouraging in the first month with the initial India stock and pipeline imports booked to a large extent.

Tata Motors' exports at 2,455 vehicles in July 2009 were down 34% from 3,696 vehicles exported in July 2008.

UV major, Mahindra & Mahindra clocked a robust growth of 73.8% y-o-y in its domestic sales of utility vehicles during the month of July 2009 at 11,608 units (6,708 units). The company also recorded a decent growth of 18.4% in its commercial vehicle sales volume at 6,048 units in domestic market. However, 3-wheeler domestic sales at 3,805 units were down 6.7%.

Two-wheeler sales remained on fast track during the month. Setting the scorching pace, Hero Honda once again came up trumps with a healthy growth of 31.9%, clocking domestic sales of 359,756 two-wheelers during July 2009 compared to corresponding sales figure of 272,664 two-wheelers a year ago.

Honda Motorcycle & Scooter India (HMSI) continued to move up the sales curve with its steady performance. The company's domestic sales numbers at 104,827 units during the month surged by 27.9% y-o-y. HMSI also turned in creditworthy performance on export front, its exports at 8,032 units growing by 138.8% and resulting in a 32.2% rise in its cumulative sales during the month.

TVS Motor Company (TVS-M) posted a 2% growth in July 2009, witnessing total two wheeler sales of 120,994 units vis-à-vis 118,545 units in the same month last year. Domestic sales of TVS-M reading 107,883 units in July 2009 climbed up 5% from 102,530 units a year back.

TVS Scooters continued to grow, recording 15% growth in sales at 27,673 units (24,156 units). Total motorcycle sales of the company were in the negative terrain and stood at 42,998 units in July 2009 as against 54,042 units recorded in July 2008. Exports continued to be affected and totalled 13,061 units of two wheelers in July 2009 as against 16,015 units in the corresponding month of the previous year.

The recently launched TVS Scooty Streak has been well received in the market and contributed handsomely to the sales numbers of the company. The Apache RTR 180 and TVS Flame SR 125 have also received encouraging response.

India's second largest two-wheeler manufacturer - Bajaj Auto continued to be on a slippery ground, its domestic sales of two-wheelers at 109,161 units during the month sliding by 4.1% y-o-y. However, the company's exports growing by 6.3% offset the loss in domestic market and reduced the de-growth rate to 0.7% in its cumulative sales of two-wheelers in July 2009.

India Yamaha and Suzuki Motorcycle also saw robust growth of 47% and 20%, respectively, in their domestic sales of two-wheelers.

With economy and especially industrial production picking up, outlook for the latter half of the year is promising. The data on industrial production released recently reveal that IIP grew by 7.8% during June 2009. It indicates quite clearly that the early signs of recovery witnessed during the last few months were no flash in pan, which is encouraging. However, vagaries of Monsoon may play spoilsport.