Auto Market Kicks Off the New Fiscal with Growth

The April 2009 vehicle sales repeated the story of the last 5 months with two clear patterns emerging. One, while the auto market is definitely growing sequentially month on month, the sales figures are not something to rave about when the growth is computed year on year. Two, commercial vehicles are not out of the rut as yet and continue to witness high double-digit negative growth. The economic slowdown is taking a heavy toll on the commercial vehicle market.

Car and two-wheeler sales saw the fifth straight month of growth in April, buttressing the evidence that the recovery was no flash in the pan and providing increasingly rare good news for a sector reeling under economic downturn.

April saw market leaders such as Maruti Suzuki, Hyundai Motors, M&M, Honda Siel and Hero Honda better their performance over the corresponding month of the previous year, helped by stimulus packages, cuts in lending rates and elections, which boosted demand for vehicles, especially MUVs.

The two-wheeler and car segments led by Hero Honda and Maruti Suzuki, respectively, together helped the domestic automobile market achieve year-on-year growth of 10.76%. The passenger vehicle segment grew by 4.36%, car market accounting for 135,697 units in April. Sales of two-wheelers grew 13.71% to 700,995 units as against 616,468 units in the same month last year.

Sales of commercial vehicles, however, continued to be under pressure and dipped 11.25%. While medium & heavy commercial vehicle domestic sales slid a whopping 42%, light commercial vehicles helped by Tata Motors' Ace and Magic, notched up a positive growth of 28% making the numbers look somewhat good.

Car market leader Maruti Suzuki India Limited sold a total of 71,748 vehicles in April 2009, including 6,891 units of export. This is the fourth consecutive month of the company's sales crossing 70,000 unit-mark. Maruti Suzuki had sold a total of 62,336 vehicles in April 2008. Maruti Suzuki's volume in the domestic A2 segment grew by 9 per cent, while in the A3 segment, the sales volume grew by 69 per cent during the month y-o-y. However, Maruti 800 continued to slide with a negative growth of 47%.

Hyundai Motor India Limited (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, clocked a growth of 10.9% in cumulative sales during the month of April 2009. While the domestic sales grew by a marginal 3.5%, the exports rose by 19.6 %. HMIL's total sales for April 2009 stood at 44,371 units against 40,000 units in April 2008. The domestic market accounted for 22,247 units, compared to 21,501 units a year ago, while the exports totaled 22,124 units in April 2009 vis-à-vis 18,499 units in April 2008.

The segment-wise cumulative sales of HMIL in the month of April 2009 are as follows: A2 Segment (Santro, i10, Getz & i20) - 41,258 units; A3 Segment (Accent & Verna) - 3,073 units; A5 Segment (Sonata Transform) - 34 units; and SUV Segment (Tucson) - 6 units.

 
Commenting on April, 2009 sales, Arvind Saxena, Sr Vice President - Marketing and Sales, HMIL said, "As compared to last year we saw a modest growth in April, 2009. However, we still feel that the market is far from witnessing a complete turnaround and it will be a while before we see healthy double-digit growth. We will however continue to offer our customers innovative schemes and products to offset the effects of the slowdown."

Mahindra & Mahindra Ltd (M&M) Automotive Sector's total domestic volumes (including joint ventures) for the month of April 2009 stood at 22,617 units, as against 19,392 units in April 2008 - a 16.6% rise. This includes the monthly sales for the Scorpio, Bolero, Xylo and the Pik-Up aggregating 18,447 units, as against 13,560 units a year earlier.

The company's cumulative sales (Domestic + Exports) in April 2009 added up to 23,004 vehicles, as against 20,030 vehicles (Domestic + Exports) sold in April 2008.

"Mahindra posted a strong performance with 36% growth in domestic sales in the UV segment. All our products including the Scorpio, Bolero and the Xylo continue to outperform the industry. The XYLO continues its strong run since its launch in January 2009 and has posted its highest monthly sales of 3,509 units in April," said Rajesh Jejurikar, Chief of Operations, Automotive Sector, M&M Ltd.

Honda Siel Cars India (HSCI) started off on a positive note in the FY 09-10 with sales volume of 3,656 units during the month of April 2009 - a decent growth of 7.5% over 3,400 units sold in April 2008.

Tata Motors' domestic sales for the month of April 2009 totalled 36,257 units, a 1% increase over 35,844 units sold in April last year. The company's total sales (including exports) stood at 37,518 vehicles, representing a decline of 2% from 38,149 vehicles despatched in April 2008.

Commercial vehicle sales of Tata Motors during April 2009 in the domestic market stood at 22,847 units, an increase of 9% compared to 21,001 units sold a year ago. This is the first month since September 2008 that the company has registered an year-on-year increase. This increase was driven by LCVs that saw a robust 52% upswing in sales. M&HCV sales at 8,053 units stayed deep in the negative terrain, falling 28% y-o-y.

Tata Motors Passenger Vehicle Business reported a total sale of 11,202 passenger vehicles, remaining flat compared to the sales figure of the same month last year. The Indica range sales at 8,633 units grew by 16.2% led by the growing numbers of the Indica Vista. The Indigo family registered sales of 2,569 units - down 31.7%, while the UV/SUV range of Sumo and Safari accounted for sales of 2,208 units, declining sharply by 39.5% y-o-y.

Tata Motors' exports adding up to 1,261 vehicles in April 2009 were also down 45%.

Ashok Leyland with domestic sales of 1,615 commercial vehicles in April 2009, plunged 71 % y-o-y.

Hero Honda Motors Ltd (HHML) led the charge in two-wheeler sales growth clocking an unprecedented sales of 370,575 units during the month of April 2009. This translates into a strong 29.5 per cent growth over April 2008. Hero Honda had sold 286,252 two-wheelers in April last year.

With this, the company carried forward its trail-blazing sales performance in the new financial year 2009-10, even as the domestic two-wheeler industry continues to reel under high interest rates, credit squeeze and overall recessionary trends.

The new models - including variants and refreshes - that Hero Honda launched in FY'09 have been driving volumes for the company. With the newall-muscle and macho Hunk, and the sporty and stylish new CBZ X-treme, Hero Honda continues to steadily grow its presence in the premium segment. Other new launches such as the Passion Pro Power Start, new Splendor NXG, and refreshes of successful models including the new Pleasure, have also been driving volumes in their respective segments.

TVS Motor Company posted a 3% growth in April 2009, clocking total two wheeler sales (domestic & exports) of 113,119 units against 109,972 units in the corresponding month of the previous year. Motorcycle sales stood at 53,235 units in comparison to 58,237 units in April 2008, while scooters registered 18,819 units of sale in April 2009 compared to 19,034 units recorded a year ago. The ongoing slowdown in some countries affected the company's exports. The company could manage exports of 10,134 units of two wheelers in April 2009 as against 10,213 units in April 2008.

Bajaj Auto witnessing domestic sales of 106,516 two-wheelers in April 2009 started off badly in the new financial year with a negative growth of 23%.

From the figures, it looks like the auto industry in India is inching towards a slow recovery. With a number of new launches, including Maruti Suzuki's Ritz, Honda Siel's Jazz and Fiat India's Grande Punto scheduled for the year and Nano slated for delivery in the month of July 2009, the market sentiment is likely to improve, particularly for the passenger vehicle and two-wheeler segments. Whether the recovery witnessed in small measure during the last few months can be sustained will also depend on the new Government continuing with the stimulus packages already announced.