Growth Encounters a Speed Breaker

The first month of the FY 05-06 started off on a dull note for the Auto Industry, especially for the CV manufacturers. Although, the overall industry grew by a healthy 20.58%, the commercial vehicle sales saw a drastic drop of 9.17% in Apr'05 as against Apr'04. The reason can be attributed to the fact that because of implementation of VAT and new emission & safety norms, the purchases were preponed to the month of March and also there were some difficulties faced in certification and procurement of critical parts for compliance with the new emission & safety norms.

The sales figures of car market leader, Maruti Udyog Limited for the month of Apr'05 are not flattering. The company sold 36,972 vehicles in the domestic market in Apr'05, as against 36,928 vehicles sold in the domestic market in Apr'04. In all, MUL sold 38,190 vehicles in April 2005 as compared to 39,838 units in Apr'04, recording a 4% dip.

Maruti's volume in the domestic A2 segment comprising Alto, WagonR and Zen, grew by 15% (22,280 units) and in the A3 segment comprising Baleno and Esteem by 78% (2,331 units) during the month compared to sales in Apr'04. Sales in the C segment comprising Omni and Versa were flat while the sales of Maruti 800 at 6,910 in Apr'05 fell by huge 38%.

Exports in the month also declined 58% i.e. to 1,218 units in Apr'05 from 2,910 units in Apr'04.

Meanwhile, the company has announced a nominal increase in prices of certain models. The increase varies from 0.15% to 0.72% for its popular models and variants. The price increase is due to increase in input costs. There has been no increase in the price of Maruti 800 and Gypsy.

Honda Siel Cars India Ltd continued its upward movement in the first month of the new Financial Year. The company registered sales of 3,575 units during the month of Apr '05, an impressive growth of 28% over 2,793 units sold during Apr'04.

General Motors India registered an over 58 per cent growth in Apr'05 as compared to last year as Chevrolet Tavera sold 1,603 units in April to cross the 15,000 mark within 11 months of its mid-2004 launch.

GM sold 2,214 cars in April as against 1,401 cars in the same month last year to clock a growth of 58.03% in monthly sales. Besides Tavera, these included 406 units of Chevrolet Optra and 200 units of Opel Corsa. April sales pushed the Tavera tally to 15,049 cars.

Tavera's impressive fuel performance has been a key contributor to its growing popularity. The launch of Chevrolet Optra NY edition with pleasing beige interiors even on base variants too has been a resounding success with customers.

Hyundai Motor India posted a strong performance in the month of April, selling 13,362 vehicles in the domestic market and registering a whopping growth of 136% over Apr'04. This phenomenal growth comes on the small base in Apr'04 when Hyundai's plant was undergoing capacity expansion.

 
Exports accounted for 6,553 units in the month, a growth of 97% compared to sales in Apr'04. The cumulative sales of the company (Exports and domestic) stood at 19,915 units in Apr'05, an increase of 121 % over the same period last year.

Following are the cumulative model-wise sales figures: 14,552 units of Santro, 1,026 units of Getz, 3,791 units of Accent, 206 units of Elantra, 119 units of Sonata, 200 units of the newly launched SUV Tucson, and 21 units of the Terracan.

Mahindra & Mahindra's sales were almost flat with sale of 10,640 (includes 238 units of exports) vehicles in Apr'05 as compared to 10,536 (includes 191 units of exports) sold in Apr'04.

Tata Motors with a total sale of 23,889 vehicles (including exports) for the month of Apr'05 as compared to 24,961 units in Apr'04 witnessed a drop of 4.29% in sales. The company's sales in the export market stood at 2,785 vehicles, a growth of 194% against 948 vehicles sold last year.

The company garnered a sale of 12,736 units passenger vehicles in the month of Apr'05 - a growth of 6.4% over Apr'04. Indica at 7,819 units grew by 7.9% for the month while the Indigo range at 2,881 units registered a growth of 5.8%. Utility vehicle sales at 2,036 units grew by 1.7%.

Total sales of commercial vehicles were 10,159 units in Apr '05, of which 8,368 units were in the domestic market and 1,791 units in the export market. Domestic M&HCV sales were 5,248 vehicles and LCV sales stood at 3,120 vehicles for Apr'05.

Commercial vehicle sales suffered, as there was an increase in un-dispatched stock of vehicles due to unanticipated difficulties in certification and procurement of some critical parts. Efforts to streamline the availability of vehicles are currently underway and the company expects to make up in the next two months.

Ashok Leyland registered a not-too-impressive growth rate of 2.67% with sale of 3,422 units (includes 251 units of exports) in Apr'05 as against 3,333 units (includes 385 units of exports) in Apr'04.

Eicher Motors registered a 25% growth in sales of its commercial vehicles in Apr'05 over the same month last year. Sales in Apr'05 were 1,171 vehicles as against 935 units in Apr'04.

Hero Honda, the 'World No.1' two-wheeler company, has started the year with a bang. The company yet again crossed 2-lakh unit sales mark and sold 2,35,422 motorcycles during Apr'05, a jump of 20.09% as compared with the corresponding period in the previous FY. The company had sold 1,96,024 motorcycles in Apr'04.

Bajaj Auto reported a 36% rise in total sale of 2 and 3 wheelers to 1,65,045 units for Apr'05 from the previous corresponding 1,21,399 units.

The motorcycle sales, up 52%, continue to beat industry growth rate for the seventh month in succession. Total two-wheeler sales added up to 1,47,592 units in Apr'05 as compared to 1,05,247 units in Apr'04, clocking a growth rate of 40%. A total of 1,37,858 motorcycles have been sold during Apr '05 registering a growth of 52% over April 2004. Sale of 3-wheelers moved up by 8% to 17,453 units in Apr'05 vis-a-vis 16,152 units in Apr'04.

Exports for the month was 19,007 numbers as against 16,838 units in Apr'04 - an increase of 13%.

TVS Motor Company's total two wheeler sales in Apr '05 stood at 92,400 units compared to 81,032 units, during the same month last year, recording a growth of 14%.

The major thrust to the overall increase in two wheelers came from the 13% growth recorded by the motorcycles, which totaled 52,825 units in Apr'05 compared to 46,881 units recorded during the same period last year.

TVS StaR crossed the one-Iakh mark since its launch and the brand has been witnessing a strong demand across the country. The company is ramping up its production to meet the increasing market demand. In order to provide further impetus to the brand 'TVS StaR' in South India, the company has appointed Surya, a popular Tamil actor as its new brand ambassador. The 'Victor' brand, namely, the GLX 125 and GX 110 models continue to registered good numbers.

Scooterette sales achieved a growth of 27% with a tally of 19,279 units in Apr'05 compared to 15,172 units recorded last year. The TVS Scooty brand is the market leader in the scooterette sub 100cc segment.

Moped sales stood at 20,296 units in Apr '05 compared to 18,979 units in the same period last year, recording a growth of 7%. The company continues to enjoy market leadership and has been consistently performing well compared to the industry.

TVS Motor Company exported 6,291 two-wheelers in Apr'05 recording a growth of 108% compared to the same period last year.

While 2-wheeler segment continued to drive up the sales graph, the performance of CVs and passenger cars was not something to rave about. However, the analysts predict that the auto industry is expected to grow by 10-15% in the current FY with new launches, attractive finance schemes and rising household income boosting auto sales.