Auto Market Switches Gears

The advent of new financial year saw auto sales shift gears to drive back on the positive growth track. Commercial vehicles, Two-wheelers and Three-Wheelers that had been reeling under slowdown for the last one year wriggled out of the sluggish spell to record positive growth.

Continuing their decent performance, passenger vehicles once again stole the show to clock healthy growth of over 20%, thanks to the excitement created by new offerings.

Car market leader Maruti Suzuki India Limited sold 59,539 vehicles in the domestic market in April 2008 as against domestic sales tally of 48,652 vehicles in April 2007, notching up 22.4% growth. In all, Maruti Suzuki India Limited sold 62,336 vehicles in April 2008, including 2,797 units of exports.

Maruti’s volume in the domesticA2 segment grew by 27.3 per cent, in A3 segment volume grew by 97.1 per cent and the C segment by 25.9 per cent during the month as compared to sales in April 2007. Maruti 800 continued to witness its downfall with a negative growth of 30% y-o-y.

Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, recorded a cumulative sales growth of 47.8% for the month of April 2008. HMIL's total sales in the month of April 2008 stood at 40,001 units, growing by a whopping 47.6% over 27,096 units recorded a year ago. While the domestic market accounted for 21,501 units, exports totaled 18,500 in April 2008 compared to the domestic sales figure of 15,728 units and exports of 11,341 units in April 2007.

Commenting on the sales, Arvind Saxena, Sr VP, Marketing & Sales, HMIL said, "HMIL sales for April had been robust with a very healthy growth and we feel that the budget has been a contributory factor. The i 10 too has done exceedingly well to establish itself as a major contributor in this segment with domestic sales alone accounting for over 50,000 units in just six months which is the fastest ever for any model and with the highest growth rate in this segment things are looking good for HMIL."

HMIL's segment-wise domestic sales in the month of April, 2008 were: A1 Segment -17,334 units; A2 Segment - 1,437 units; A3 Segment - 2,668 units; A4 Segment - 3 units; A5 Segment - 50 units; and SUV Segment - 9 units.

Honda Siel Cars India (HSCI) sold 3,400 units in April 2008 as against 4,891 units sold during the same month previous year, registering a steep decline of 30%. Model wise sales break-up for Honda Siel during the month was: City ZX - 1,981 units; Civic - 1,147 units; and CRV - 272 units. The launch of 8th generation Accord, the deliveries of which had been suspended for quite a some time is expected to make the sales numbers somewhat healthier for the company from May 2008 onwards.

 
Mahindra & Mahindra, a part of the US $6 billion Mahindra Group, consolidated its leadership position in the UV segment during the month. The company's domestic UV sales in April 2008 stood at 9,809 units as against 7,126 units in April 2007, which translates into a growth of 37.7%. The exports grew to 295 units during the month from 147 units a year ago.

Mahindra Logan selling 1,713 units in April 2008 fell short of the expectation. Mahindra's 3-wheeler sales at 3,343 units in April 2008 rose by 66.7% over 2,005 units in April 2007.

Tata Motors reported a total sale of 38,149 vehicles (including exports) for the month of April 2008, a decline of 5.8% vis-à-vis sales tally of 40,486 vehicles sold in April last year.

The company's sales of commercial vehicles in April 2008 in the domestic market aggregated 21,001 units, up 7% compared to 19,607 units sold in April last year. M&HCV sales stood at 11,248 units, rising 8% over April 2007. LCV sales at 9,753 units recorded an increase of 6% y-o-y.

Tata Motors Passenger Vehicle Business logging a total sale of 14,843 vehicles in the domestic market in April 2008, slid by 12% compared to 16,842 units sold in April 2007. While the Indica sold 7,430 units, going down by 31.6%, Indigo family registered sales of 3,763 units zooming 43% over April 2007. Sumo and Safari sales at 3650 units in April 2008 were up 9.3%.

Tata Motors exports adding up to 2,305 vehicles in April 2008 as compared to 4,037 vehicles in April 2007 also took a hit by 43%.

Sustaining the tempo, General Motors India (GMI) clocked a sales growth of 24.3 per cent in April 2008, compared to the corresponding month last year. GMI sold 5,563 units in April 2008 as against 4,474 units April 2007. Sales of the Chevrolet Tavera grew by 12 per cent and the Optra by 24 per cent, y-o-y. The company's April 2008 sales comprised of 1,963 units of the Chevrolet Spark, 1,863 units of the Chevrolet Tavera, 1,055 units of the Chevrolet Aveo, 393 units of the Chevrolet Optra, and 289 units of the Chevrolet Captiva.

Ashok Leyland recorded domestic sales of 5,549 commercial vehicles, managing a paltry growth of 1 %. The company's exports at 156 units declined by 57% from the export figure of 362 units in the corresponding month last year.

While commercial vehicles, which had strayed off the track in the first half of previous fiscal, stayed on recovery path, for a refreshing change, the two-wheelers regained the growth momentum that has got derailed during the last financial year.

Bajaj Auto staged a turnaround of a sort in its two-wheeler sales registering positive growth in domestic market after a long interval. The company's domestic sales aggregating 138,810 two-wheelers rose by 8.5% and the exports at 65,120 two-wheelers grew by robust 72%. Cumulatively, Bajaj Auto's two-wheelers sales numbers were up 23.6% in April 2008, owing to the strong performance of its 125cc+ DTS-i portfolio; combined sales of Pulsar, Avenger, Discover, and XCD grew 34%. Consequently, in the 125cc+ segment, which is now approximately 36% of the motorcycle industry, Bajaj continues to lead with a market share of approximately 50%.

Bajaj is set to introduce four 125cc+ motorcycles in FY09 in its endeavour to expand the 125cc+ segment to represent 50% of the industry by March 2009. The company is banking on its strong growth in exports, which are expected to continue to reach over 800,000 units this year.

Bajaj 3-wheeler sales at 9,409 units in domestic market during the month of April 2008 vis-à-vis 10,244 units recorded a year ago continued on downward curve. The company's 3-wheeler exports at 8,504 units also dropped by 40% y-o-y in April 2008.

Hero Honda stayed on course to clock a growth of 10% in its domestic two-wheeler sales during the month. Domestic sales making up 282,412 units grew by 10% and exports at 3,840 units plummeted by 40%.

TVS Motor Company also arrested its downhill slide with a growth of 2% in domestic sales of two-wheelers. The company clocked sale of 99,759 two-wheelers. Exports at 10,213 units zoomed 41%. Total sales including domestic and exports posted a growth of 4.8%.

TVSM intends to introduce seasonal limited editions every year. Accordingly, the company signed up with the All England Lawn Tennis Club (AEL TC) as a licensee and will bring out two limited edition scooters, designs of which will be inspired by the spirit of Wimbledon. These scooters with sporty attitude will appeal to women and will be launched to coincide with forthcoming the Wimbledon season.

The new financial year augurs well for automobile market. However, continuing volatile oil prices in international market, higher interest rates, credit squeeze by banks and slowdown in industrial activity are likely to make the going tough on the road ahead.