Auto Market Scales New Peak

Auto market in August 2010 continued from where it had left off in July. Sales were not only robust but also set new records. The performance was remarkable in that high-speed sales growth was achieved despite heavy rains, water logging and floods in several parts of the country. The new sale highs are all the more relishing for auto market, as the first quarter of a financial year is considered to be a sluggish period.

The domestic vehicle sales soared to a new high of 12,63,293 units in August 2010 - 25.2% more than a year earlier. The previous high of 12,37,461 units was achieved only in the month of July 2010. Auto sales have been in top gear this year as evidenced by two consecutive months of new highs. The blip in an otherwise bright scenario was the passenger vehicle exports that fell 7.4% to 38,279 units from 41,345 units recorded in August 2009, as the international markets, especially Europe are yet to recover from recession and scrappage incentives have run their course.

Domestic passenger vehicle and two-wheeler sales surged to an all-time high in August as automakers scrambled to meet demand boosted by positive sentiment, rising incomes, new models and lower borrowing costs. Stocks' build-up at dealerships in anticipation of the continuing strong demand during the oncoming festival season also contributed to the surge.

Commercial vehicles and 3-wheeler sales too were in express lane driven by fast improving economy and healthy industrial output. Domestic sales figure of 49,732 units was the best ever in the case of 3-wheelers. However, the CV sales at 52,030 units, though exciting, fell short of the previous best of 56,262 units sold in domestic market in March 2008 and were also a shade shy of 52,211 units recorded in June this year.

Domestic passenger vehicle sales zoomed 34.25% from a year earlier to 204,227 units, which bettered the previous best of 202,093 units recorded in July 2010.

In two-wheelers, domestic sales of scooters climbed up 43.6% to 170,482 units (118,694), while bike sales vroomed 19% to 727,542 units (611,168). Two-wheeler exports at 125,057 units, thanks to consistent stellar performance of Bajaj Auto, stayed on course, growing by an impressive 39.2% y-o-y.

Three-wheeler sales were also on high-growth trajectory in both domestic and overseas markets. While domestic sales rose 26.8%, exports were up 46.4%.

Car market leader Maruti Suzuki India Limited that sells one car out of every two cars sold in the country continued in a fast-forward mode, selling a total of 104,791 units (domestic sales: 92,674 units and exports: 12,117 units) in August 2010 and clocking a growth of 23.6% over the corresponding sales tally of 84,808 units last year. This is the highest ever-monthly sale recorded by the company. Maruti Suzuki has had a spectacular run so far during this year that has seen the company crossing 1-lakh-unit mark three times. The company's strong performance was aided by new models and 5 CNG variants introduced of late. An array of small cars in its product portfolio saw Maruti Suzuki's domestic sales volumes in A2 segment grow by 25.7% to 65,953 units during the month. A3 segment volumes at 10,479 units during the month also witnessed a strong 34% growth y-o-y.

 
Hyundai Motor India Ltd, the country's second largest car manufacturer and the largest passenger car exporter, turned in a decent performance on domestic turf with sales growing by 17.2% to 28,601 units in August 2010 from 24,401 units year ago. HMIL's total sales during August 2010 stood at 50,636 units as against 49,522 units in August 2009, registering a 2% growth. However, the company's exports that have been witnessing a downtrend for some time, slipped by 12.3 % from 25,120 units in August 2009 to 22,035 units in August 2010, due to slowdown and withdrawal of scrappage incentives in European markets. The segment-wise cumulative sales of HMIL during the month of August 2010 stood at: A2 segment (Santro, 110 & i20) - 45,804 units; A3 Segment (Accent & Verna Transform) - 4,806 units; and A5 segment (Sonata Transform) - 26 units.

Riding on the good numbers contributed by Chevrolet Beat and Spark, General Motors India registered an impressive growth of 34%, selling a total of 7,889 units during August 2010 in domestic market against 5,875 units in August 2009. The August 2010 sales comprised of 2,481 units of Spark, 2,475 units of Beat, 1,438 units of Tavera, 724 units of Cruze, 325 Units of Aveo, 240 units of Aveo U-VA, 176 units of Captiva and 82 units of Optra.

Honda Siel Cars India (HSCI) reported unprecedented August sales since its inception in 1998. The company saw its sales rise by a healthy 38.75% to 5,532 units in August 2010 from the sales figure of 3,987 units in August 2009. Modelwise sales break-up for HSCI during August 2010 reads as follows: City- 4259; Jazz- 593; Civic- 455; Accord- 203; CR-V-22.

In keeping with its robust performance during this year, Tata Motors carried on with its growth momentum, selling 65,938 units of commercial and passenger vehicles during August 2010 in domestic and international markets. This translates into a growth of 32% over 49,810 units sold in August 2009. The company's domestic sales volume of commercial and passenger vehicles aggregating 60,781 units grew by 29% y-o-y.

Commercial Vehicle Business Unit of Tata Motors clocked sales of 35,585 units in the domestic market during August 2010, a 20% increase over 29,762 units sold in August last year. CV exports at 4,153 units jumped by 98% over 2,096 units a year ago.

Passenger Vehicles Business Unit of Tata Motors notched up domestic sales of 25,196 units in August 2010, up 45% y-o-y. Nano contributed a significant number to the tally with sales of 8,103 units. The Indica range sales at 7,531 units were lower by 22% y-o-y. The Indigo range recorded sales of 6,678 units, a growth of 151 %, while the Sumo/Safari range accounted for sales of 2,884 units, higher by 11 % y-o-y.

Tata Motors’ exports during the month vaulted by 92% to 5,157 vehicles.

Though not flashy, Mahindra & Mahindra (M&M) continued with its steady performance, posting a growth of 22.3% in domestic sales of UVs, CVs and 3-wheelers, which added up to 25,602 units in August 2010. UV sales at 12,840 units in domestic market during the month clocked a 12.2% growth y-o-y.

Keeping pace with the buoyant CV market, Ashok Leyland also came up with an impressive show with domestic sales of 6,705 units during August 2010, which reflected a 58.4% uptick y-o-y. The company's exports at 775 units were up 40.7%.

Hero Honda Motors Ltd (HHML), the world's largest two-wheeler manufacturer saw a paltry growth of 1 % in domestic sales at 413,162 units in August 2010, due chiefly to the large base of 408,325 units a year ago and heavy rains & floods that dampened the sales. However, HHML witnessed its exports growing by a whopping 68% to 11,455 units during the month.

Bajaj Auto Ltd saw its 2-wheeler domestic sales zooming by 71.6% to 209,567 units during August 2010 vis-à-vis 122,098 units in August 2009. Bajaj continued with its impressive export performance, exporting 79,609 two-wheelers during the month, which represents a decent 30.6% growth over a high base of 60,953 units exported a year ago.

Bajaj's three-wheeler sales of 21,219 units (15,810 units) in domestic market too grew by a healthy 34%, while its exports at 18,969 units surged by 33.5% y-o-y.

In an impressive showing, TVS Motor Company clocked a 32% growth in its total two-wheeler sales (including exports) at 167,109 units in August 2010 as against 126,842 units recorded in August 2009. Domestic 2-wheeler sales tally of 148,081 units in August 2010 rose by 29% from 115,095 units in August 2009. Exports at 19,028 units grew by a significant 62% y-o-y during the month.

Honda Motorcycle & Scooter India (HMSI) posted a formidable 39% growth in its total domestic sales in August 2010 at 125,559 units (90,290 units).

India Yamaha clocked a 29.8% uptick in its total sales that added up to 30,450 units in August 2010 as against 23,466 units a year earlier. The domestic market accounted for 22,672 units, while exports totalled 7,778 units.

The economic recovery is deepening as key indicators suggest. GDP during the 1st Quarter grew by a decent 8.8%. The economy is on course to achieve 8.5% growth during the current fiscal, as projected by the Government. If any corroborative evidence on firmness of the recovery was needed, that came out cogently with IIP growing by a healthy 13.8% and manufacturing sector by 15% in July 2010. The flipside is that the robust industrial output numbers have prompted RBI to further increase the key policy rates to tame the inflation that is hovering stubbornly around 11% - much outside the comfort zone. However, a little increase in interest rates is not likely to have any significant impact on sales numbers, thanks to the buoyant economy and improving business & consumer sentiment. With a long festival season round the corner and more disposable income in the hands of people, auto sales are expected to grow at a steady pace. The growth may moderate somewhat, though, due to higher base kicking in from September.