Festivals Sans Fervour

The auto market had expected the auto sales to bounce back in October 2008 riding on the major festivals and the Sixth-Pay-Commission bonanza to the Government employees. This was not to be thanks to the continuing stranglehold of credit squeeze and high interest rates. The festive season failed to revive the buoyancy in sales. Domestic vehicle sales witnessed a sharp 14.42% fall to 8.65 lakh units in October from 10.11 lakh units a year ago. This was, incidentally, the biggest drop in eight years.

What is worrisome is that the sluggishness in demand is all-pervasive, encompassing all segments of motor vehicles. Domestic car sales went into the reverse gear dipping by 6.6% to 98,900 units from the previous corresponding sales figure of 1,05,877 units. Motorcycle sales were down 18% to 5.38 lakh units against 6.57 lakh units in the same month last year. Similarly, bus and truck sales in the medium and heavy commercial vehicle segment witnessed a free fall, their sales declining by massive 50% year-on year.

Car market leader Maruti Suzuki India Limited sold 64,490 vehicles in the in October 2008, including 5,363 units of exports. This translates into a drop of 7% from the corresponding sales tally of 69,415 vehicles in October 2007. While exports rose by 4%, domestic sales at 59,217 units declined by 8%. However, beating the slowdown, Maruti's sales volume in the domestic A3 segment went up by 29.6 per cent on the back of continuing strong demand for its latest offering Swift DZire.

Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, riding high on its exports registered a 65.8% overall growth in October 2008. With the global success of the i10, HMIL's exports soared by a whopping 168.4%, while the domestic sales grew by 9.9% over October, 2007. Of the total sales adding up to 46,660 units, the domestic market accounted for 20,009 units (18,207 units) and the exports totaled 26,651 units (9,929 units) in October 2008. The segment-wise cumulative sales of HMIL in the month of October 2008 are as follows: A2 Segment (Santro, i10 & Getz) - 40,937 units; A3 Segment (Accent & Verna) - 5,703 units; units, A5 Segment (Sonata Embera) - 12 units; and SUV Segment (Tucson) - 8 units.

Commenting on the October, 2008 sales, Arvind Saxena, Sr Vice President - Marketing and Sales, HMIL said, "At a time, when we are faced with one of the most challenging economic downturns not only in India but globally, we are happy to see Hyundai retaining its market leadership position in compact cars and growing steadily. We feel the growth would have been even stronger but for the financial meltdown. In the coming months, if the situation does not ease off then the automotive industry here will be in for very tough times."

 
General Motors India (GMI) managed to drive into positive territory with a sales growth of 6% per cent in October 2008, piggybacking the Chevrolet Spark. Despite sluggish market conditions, GMI sold 6465 units in October 2008 as against 6,139 units during the same month last year. General Motors India's October 2008 sales comprised of 4,390 units of the Chevrolet Spark, 855 units of the Chevrolet Tavera, 934 units of the Chevrolet Aveo, 153 units of the Chevrolet Optra and 133 units of the Chevrolet Captiva.

Tata Motors bitten by the slowdown bug, ended up with total sales of 39,729 vehicles (including E3xports) during the month of October 2008, which reflect a decline of 20% compared to 49,354 vehicles sold in October last year. Explaining the continuing slide in its sales, the company said that unavailability of finance, coupled with high interest rates, is forcing customers to postpone purchases.

TML's sales of commercial vehicles in October 2008 in the domestic market aggregated 19,154 units, down 29% from 27,103 vehicles sold in October last year. Total domestic sales of Tata passenger vehicles at 17,014 units in October 2008 declined by 6% from the sale figure of 18,021 units in October 2007. The Indigo range driven by Indigo CS continued to have a good run with sales of 4,616 units, which translates into a 96% growth y-o-y. The Sumo and Safari accounted for sales of 2,914 units, falling sharply by 27%. The UV/SUV range has been under pressure in the market since the July ad hoc imposition of an additional element of excise duty on vehicles having engine displacement of over 1.5 litre, the company said.

As other players in the volumes segment, Mahindra & Mahindra could not fend off the current downbeat market sentiment. Sales volumes of the company recorded a negative growth y-o-y during the month of October 2008. While the company's utility vehicle sales slumped 16% to 9,394 units, its CV sales in the domestic market plummeted by 18.4%. Mahindra 3-wheeler domestic sales volume at 4,282 units, however, clocked an 11.6% rise.

Honda Siel Cars India (HSCI) slipped deep into the negative terrain with its sales at 1,476 units nose-diving 72% from the corresponding sales figure of 5,286 units in the last year. The performance of other car majors, Toyota and Ford was also wobbly.

Audi lndia recorded an impressive growth of 312% in its October 2008 car sales at 107 units in the Indian market. In the current calendar year, i.e. January to October 2008, Audi India has increased its sales by 203% to 884 cars (January-October 2007: 292 units).

"After consistently recording highest sales in each month of this year, Audi succeeded again in increasing sales figures and the growth of market share in October in India. The introduction of new thrilling models with the "Vorsprung durch Technik" brand core for the Indian market and the expansion of dealerships will keep the brand growing aggressively in India", said Benoit Tiers, Managing Director of Audi India.

The most successful models in October were the newly launched Audi A4 and the Audi Q7, underlining its leadership in the luxury SUV segment. The Audi model range consisting of the new Audi A4, Audi A6, Audi A8, Audi Q7 and Audi TT is available in India at present in twelve dealerships across the country: in Delhi, Gurgaon, Chandigarh. Mumbai, Pune, Bangalore, Hyderabad, Ahmedabad, Ludhiana, Chennai, Kochi and Kolkata. Sports car: Audi R8 launched in the first week of November has already been sold out for 2008.

Two-wheelers that had managed to post a modest growth till September 2008, albeit on a low base, were also in the negative terrain. All two-wheeler majors barring HMSI recorded negative growth in the domestic market.

Hero Honda that had pitched its sales target of over 5 lakh units during the festival season was nowhere near the goalpost and could muster domestic sales of 345,147 two-wheelers during the month of October 2008. The company's October 2008 sales tally in the domestic market was lower by 4% than the corresponding sales volume of 359,315 two-wheelers a year ago.

Bajaj Auto, another two-wheeler major saw its domestic two-wheeler sales plummeting by 50% to 103,661 units during the month of October 2008. However, exports at 61,816 units and growing by staggering 42.7 per cent provided respectability to the company's overall two-wheeler sales figure during the month, but could not halt the slide in cumulative sales.

TVS Motor also posted a negative growth of 15.6% in its two-wheeler sales at 100,088 units. However, exports of two-wheelers aggregating 17,013 units surged 53% to help company knock off a part of the shortfall in domestic market.

Bucking the trend, Honda Motorcycle & Scooter India (HMSI) increased its two-wheeler sales tally by 22.4% to 93,546 units from 76,416 units a year ago.

Global financial gloom has not spared India. Credit crunch and high lending rates coupled with the crash of stock market have put a spanner in the wheels of auto industry and made all the forecasts go awry. One thing that is certain is that auto companies are going to miss their targets. Indian auto market has to brace for a low single-digit growth during the current fiscal contrary to the buoyant mood in the beginning of the year.