Financial Year Kicks Off in Style

The year 2010-11 began on a resounding note and saw auto market maintaining the momentum of last year with a healthy double-digit growth in April 2010 backed by new launches and soft interest regime. As the economic recovery gained traction, more cash in the wallet and rising consumer confidence led to greater demand for vehicles, causing supply bottlenecks at some of the companies and catching them flat footed by the unexpected surge.

To meet the unexpected demand, manufacturers are ramping up their production capacity and setting up new manufacturing facilities. However, the industry feels that the demand would get impacted from the second quarter of 2010 onwards, as raw material prices continue to shoot up and higher base effect comes into play.

Total vehicle sales (including exports) in April 2010 at 1,321,624 units clocked a robust 31.92% growth over 1,001,804 units in April 2009. Low base of the last year, increased pace of economic activity, higher freight rates and soft interest rates encouraging operators to invest in new vehicles, all helped CV sales post a spectacular growth. CV sales in domestic market during April 2010 at 49,086 units (29,842 units) soared by 64.5%, while exports at 3,888 units were up 132.7% y-o-y.

Passenger vehicle sales grew by a healthy 33.93% in domestic market despite price increase of up to Rs. 10,000, following introduction of new emission norms effective April 1, 2010 and increase in input costs. The buoyancy witnessed in April 2010 was a continuation of the double-digit growth posted in the previous months. The total number of cars, UVs and MPVs sold in domestic market during the month aggregated 182,181 units.

In keeping with the overall upsurge and buoyant scenario, two-wheeler and three-wheeler sales were also on high-growth trajectory during the month. While two-wheeler domestic sales in April 2010 rose by 22.07% to 855,670 units, three-wheelers clocking 33,144 units of domestic sales surged by 20.4% y-o-y. Export numbers of two-wheelers and three-wheelers witnessed a spectacular leap, rising by whopping 96.9% and 202.5%, respectively, during April 2010.

Maruti Suzuki India Limited sold a total of 93,058 units in April 2010 compared to 71,748 units in April 2009, growing by 29.7%. The April 2010 sales tally included exports of 13,024 units, which witnessed a growth of 89% over export figure of 6,891 units in April last year. Maruti Suzuki's volume in the domestic A2 segment (comprising Alto, A-Star, Estilo, WagonR, Swift and Ritz) grew by 20.5% per cent and in the A3 segment, comprising Swift Dzire & SX4, by 41.4% y-o-y during the month.

Hyundai Motor India Ltd (HMIL) stayed on course with its domestic sales growing by 28.1 % over April 2009. HMIL's total sales for April 2010 stood at 52,020 units as against 44,370 units in April 2009 posting a 17.2% growth. The domestic sales accounted for 28,501 units as against 22,247 units in April 2009. The company's exports showed signs of moderation and grew by 6.3% from 22,123 units in April 2009 to 23,519 units in April 2010. The segment-wise cumulative sales of HMIL for the month of April 2010 were as follows: A2 Segment (Santro, i10, Getz & i20) - 46,059 units; A3 Segment (Accent & Verna) - 5,944 units; and A5 Segment (Sonata Transform) - 17 units.

General Motors India clocked an impressive 119.8% growth in sales to 10,601 units in April 2010 from 4,823 units a year earlier. The April sales comprised of 3,852 units of Chevrolet Beat, 3,507 units of Chevrolet Spark, 1,529 units of Chevrolet Tavera, 692 units of Chevrolet Cruze, 529 units of Chevrolet Aveo U-VA, 315 units of Chevrolet Aveo, 115 units of Chevrolet Captiva and 62 units of Chevrolet Optra.

 
Tata Motors' sales (including exports) of commercial and passenger vehicles in April 2010 totalled 57,202 units, a growth of 52% over 37,518 units sold in April 2009. The company's domestic sales of commercial and passenger vehicles for April 2010 stood at 54,065 units, posting a 49% increase over the sales figure of 36,257 units in April 2009.

Tata Commercial Vehicle sales in April 2010 in the domestic market added up to 27,991 units, a 40.8% rise over 19,873 units a year ago. LCV sales were 14,834 units, up 25.5% y-o-y. M&HCV sales stood at 13,157 units, growing by 63.4% over April last year.

Passenger Vehicle Business Unit of Tata Motors reported a total sale of 23,102 units in the domestic market in April 2010, a 70% increase over 13,410 units in April 2009. While Nano sold 3,525 units, the Indica range notched up 9,036 units of sale - a 5% rise y-o-y. The Indigo range sales at 7,201 units were up 180%. The Sumo/Safari range accounted for sales of 3,340 units, growing by 51 % over April 2009.

Exports of Tata Motors at 3,137 units in April 2010 posted a growth of 149% compared to 1,261 units a year earlier.

Mahindra & Mahindra Ltd (M&M), clocked total domestic sales of 23,874 units, including CVs, 3-wheelers and UVs, in April 2010, which translates into an increase of 8.2% over domestic sales figure of 22,067 units in April 2009.

The domestic UV sales of M&M in April 2010 were in negative terrain slipping by 9.3% from 13,911 units recorded a year ago to 12,614 units during the month. However, its CV and 3-Wheeler sales in domestic market aggregating 8,212 units and 3,048 units were in positive territory, rising by 58.4% and 2.6%, respectively, y-o-y.

Ashok Leyland Ltd (ALL) continued from where it had left off in March. The company's total vehicle sales at 6,500 units (1,750 units) in April 2010 vaulted 271.4%, albeit over a low base of the previous year during which the acute economic slowdown following the global financial meltdown took a heavy toll on CV sales. Domestic sales of Ashok Leyland at 5,990 units (1,615 units) were up 271 % and export at 510 units (135 units) witnessed a 278% increase y-o-y.

Excellent run that Hero Honda Motors Ltd (HHML) has enjoyed in the last 3-4 years encountered a speed breaker during the month of April 2010. The world's largest two-wheeler manufacturer slowed down and ended up with the flat sales due to supply problems with batteries arising from industrial unrest at one of the company's battery suppliers. The company logged domestic sales of 362,390 units in the month of April 2010, which were a tad lower than 363,357 units clocked in April 2009, while exports climbed up by 28.3% to 9,262 units from 7,218 units a year earlier.

Bajaj Auto, India's second largest two-wheeler player was in overdrive clocking a 75.7% growth in domestic two-wheeler sales and 103.9% rise in two-wheeler exports during the month of April 2010. Driven by improving consumer sentiment and successful launch of three products - Pulsar 220cc (variant), Discover 100cc and Pulsar 135cc, the company's total sale of two-wheelers (including exports) aggregated 276,122 units, up 83.8% over the corresponding previous sales figure of 150,252 units. Domestic sales of two-wheelers numbering 188,021 units achieved a healthy 75.7% growth. Bajaj Auto two-wheeler exports vroomed by 104% y-o-y to 88,101 units in April 2010.

Bajaj Auto's 3-wheeler sales were also in fast lane with domestic sales at 11,540 units rising by 13.2% and exports at 25,810 units growing by a handsome 197.5% y-o-y. Sales figures (including exports) of 2-wheelers and 3-wheelers during April 2010 were, incidentally, the highest ever for Bajaj Auto.

TVS Motor Company began the first month of FY11 on a high note, with its total two-wheeler sales growing 27.9% from 113,119 units in April 2009 to 144,689 units in April 2010. TVS two-wheeler sales in domestic market increased by 21.8% from 102,985 units in April 2009 to 125,471 units in April 2010. Two-wheeler exports at 19,218 units recorded a fabulous 90% growth during the month of April 2010.

Honda Motorcycle & Scooter India (HMSI) posted a decent 41% rise in April sales at 136,862 units. In the domestic market, sales of scooters jumped 32.9% in April 2010 to 71,477 units, while motorcycle sales soared 48.3 % to 58,041 units.

Other two-wheeler players, viz. Suzuki Motorcycles and India Yamaha Motor also came up with a robust performance during the month. Suzuki Motorcycles sold 20,771 units in April 2010 as opposed to 13,556 in April 2009, notching up an impressive growth of 53%. India Yamaha Motor registered y-o-y growth of 42% in its total sales at 24,960 units during April 2010. The company's domestic sales in April 2010 accounted for 16,861 units - a growth of 11.5%, while its exports at 8,099 units grew by a robust 230% y-o-y.

The economic recovery is getting firm as seen from the industrial production index that has registered a double-digit growth for six consecutive months from Oct'09 to Mar'10. Robust demand for consumer durables, in general, is an indicator that uncertainty is ebbing off and consumer confidence returning. The Government and various multilateral agencies are upbeat on the Indian economy and have projected over 8% GDP growth during the current and the next financial years. This augurs well for Indian auto market.

However, inflation continues to hover at high levels beyond the comfort zone and petroleum prices in the international market remain unstable, which is a cause of concern. While outlook for auto market is promising, spiralling prices of food items and crude oil can put a spanner in the wheels.