Auto Market Stays Downbeat

The vehicle sales performance in domestic market continued to in the low gear during the month of February 2008. The market was unable to come out of the slowdown mode it has unwarily slipped into since the beginning of the current fiscal. It was the same old story of passenger cars clocking a semblance of growth rising 8%, CVs displaying recovery signs with a paltry growth of 1 .7% but nowhere near their performance in the FY07, and 2/3-wheelers sliding deep into the negative terrain by as much as 14% and 16%, respectively in February 2008.

Car market leader Maruti Suzuki India Limited (MSIL) sold a total of 63,822 vehicles in February 2008. This includes 4,511 export units. Domestic sales of MSIL during the month at 59,311 units were virtually flat inching up by measly 0.4% vis-à-vis 59,095 units in February 2007. The company's exports at 4,511 units in February recorded a rise of 15.5% over 3,904 units a year ago. In the process, MSIL became India's first car manufacturer to export 5 lakh cars cumulatively. Total sales comprising domestic sales and exports, aggregating 63,822 units were up 1 .3% y-o-y during the month.

Maruti's volume in the domestic A2 segment went up by 2.7 per cent and in A3 segment by 8.9 per cent y-o-y.

Riding on its impressive export performance, Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, finished with an overall sales figure of 29,001 units in February 2008 as against 25,026 units in the corresponding month last year. This translates into a growth of 16%. While domestic sales at 14,600 units slipped by 5.4%, the exports accounting for 14,401 units notched up a whopping 50.5% increase as compared to the sales tally of February, 2007.

The segment-wise cumulative sales of HMIL in the month of February 2008 are as follows: A 1 Segment - 24,563 units; A2 Segment - 4,402 units; A4 Segment - 27 units; and SUV Segment -'9 units.

Commenting on the sales, Arvind Saxena, Sr Vice President, HMIL said, "Hyundai Motor has been able to register steady growth at a time when the industry grow1hl seems to be slowing down. The budget has brought in some good news and should provide the necessary impetus for the small car growth. We have already passed I on the benefit of the excise duty cut to customers on three models - Santro, i10 and Getz and expect sales to growl across these segments in the coming months."

General Motors India stayed on a fast-forward mode with a growth of 80% in sales in the month of February 2008 as compared to the corresponding month last year. The company clocked 5,563 units of sale in February 2008 as against 3,087 units in February last year. The February 2008 sales comprised of 1,681 units of Chevrolet Tavera, 1,102 units of Chevrolet Aveo, 360 units of Chevrolet Optra, 2,229 units of Chevrolet Spark and 191 units of Chevrolet Captiva.

 
GM India is in the process of expanding its dealership and service centre network to support the increasing market demand for its products. By the end of this year, GMI intends to put in place 125 sales points and 135 service outlets across the country from the current tally of 108 sales points and 113 service outlets.

Ford India continued to tread on a stiddy track. The company's domestic sales totaling 2,434 units in February 2008 compared to 3,856 units recorded a year ago, slumped by 37%.

Honda Siel Cars India recovered to post a 7.3% growth in domestic sales & export, clocking 3,779 units in February 2008 as against 3,521 units in February 2007.

Mahindra & Mahindra turned in a superlative performance in utility vehicle segment, selling 9,568 units (domestic + exports) and, thereby, zooming 79% from the sales figure of 5,240 units a year back. However, the company's commercial vehicle and 3-wheeler sales numbers were not something to write home about. While its CV numbers comprising domestic sales & exports at 4,985 units (5,463 units) were down 8.7%, the 3-wheeler sales aggregating 2,341 units (3,041 units) slid by 22% during the month.

Tata Motors witnessed a total sale of 54,181 vehicles (including exports) for-the month of February 2008, nearly flat compared to 53,707 vehicles sold in February last year. Cumulative sales (April 2007-February 2008)) for the company were also flat at 5,15,906 units.

TML's Passenger Vehicle Business recorded a total sales of 18,766 vehicles in the domestic market in February 2008, a decline of 12% from 21,322 units sold in February 2007. The Indica sales of 10,129 units saw a steep fall of 19.5% y-o-y. The Indigo family clocking 3,322 units dropped by 3.3% vis-à-vis the February 2007 sales figure. The Sumo and Safari clocked 5,315 units, up 0.2%. Safari with sales tally of 2,302 units was up 15% y-o-y during the month.

The company's sales of commercial vehicles in February 2008 in the domestic market added up to 31,318 units, rising 12.4% compared to 27,859 vehicles sold in February last year. M&HCV sales stood at 16,894 units, a growth of 4%, while LCV sales at 14,424 units, notched up a robust increase of 25% over February 2007.

Exports of Tata Motors at 4,097 units in February 2008 declined by 9.5% compared to 4,526 units in February 2007.

Ashok Leyland with domestic sales tally of 6,824 units (7,353 units) in February 2008 skidded by 7.2% in keeping with the overall market sentiment.

Two-wheeler scenario continued to be downbeat in spite of new offerings. Domestic sales were down a slippery slope.

Bajaj Auto clocked sales of 108,614 two-wheelers in domestic market, recording a negative growth of 27%. The company, however, sustained the buoyancy of its increased exports that grew by a healthy 102.5%. The exports increased from 25,138 two-wheelers ago to 50,894 two-wheelers in February 2008. Overall, in terms of domestic sales and exports, Bajaj Auto was down by 8.4% during the month.

Hero Honda managing domestic sales of 247,735 two-wheelers also slipped on the growth curve by 7.3%. The company, however, came up with a significantly improved performance on export front. The exports at 10,119 units rose by 96%, the company ending up with an overall decline of 5.4%.

Honda Motorcycle & Scooter India (HMSI) bucked the trends again with a growth of 4.7% in domestic sales and 138.4% growth in exports albeit on a small base of 1,053 units. The company's aggregate sales of 75,432 two-wheelers were up 6.7% y-o-y during the month.

TVS Motor (TVSM) stayed on a sticky wicket with a negative growth of 26% in domestic sales at 82,712 units in February 2008 compared to 112,093 units in the corresponding month previous year. The company's exports totaling 12,523 units in February 2008, however, continued their upward march and rose steeply by 56% from 8,017 units a year ago. TVSM is counting on its new offering Flame in the Executive segment to rev up its sales numbers.

In keeping with the slowdown in economy, the auto sales continue to experience bumpy ride. The 2-wheelers, in particular, have taken a big knock because of higher interest rates and stringent lending norms adopted by the banks and NBFCs for two-wheeler finance. It is too early for the spin-off of Union Budget proposals on auto market to be visible at this stage. One thing is sure that unless the tax cuts announced in the budget are accompanied by the lowering of interest rates and the easing of finance availability, the two-wheeler market may find the going tough.