Auto Market Showing Signs of Recovery

After being in the negative terrain for six months of the current financial year, October sales of vehicles gave a whiff of auto market recovering the lost ground in the remainder of the year. While commercial vehicles clocked a decent growth of 12% in the domestic market thanks to a whopping 25% rise witnessed by LCV segment, two-wheelers continued to post negative growth for the seventh month running albeit at a lower level of about 4%. Passenger cars stayed on course to record a healthy growth of 17%.

Car market leader Maruti Suzuki India Limited sold 64,258 vehicles in the domestic market in October 2007 as against the domestic sales figure of 55,894 vehicles in October 2006, thereby growing at 15%. In all, Maruti Suzuki India Limited sold 69,415 vehicles in October 2007. This includes 5,157 units of exports that were up 21 % y-o-y.

Maruti's volume in the domestic A2 segment went up by 20.9 per cent and in A3 segment by 54.7 per cent during the month compared to October 2006. Swift Diesel and SX4 were once again the star performer for Maruti Suzuki, while M800 was down in the dumps with a massive 29.5% fall.

Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, registered a 7.8% growth in its sales, which stood at 28,136 units (including exports) during October 2007. The company's domestic market accounted for 18,207 units and exports totalled 9,929 units in October 2007. While exports recorded a 32.3% increase over 7,507 units exported a year ago, the domestic sales were down by 2% from 18,603 units in October, 2006.

HMIL's segment-wise cumulative sales in the month of October 2007 were: A 1 Segment - 24,016 units; A2 Segment - 4,061 units; A3 Segment - 18 units; A4 Segment - 31 units; and SUV Segment - 10 units.

General Motors India (GMI) witnessed a record growth of 95 per cent in sales in October 2007 as compared to the corresponding period last year, thanks to limited period promotional offer during Navratras. GMI sold 6,139 units in October 2007 as against 3,153 units in October last year, making it the highest-ever monthly sales figure achieved by GM India since its inception. The October 2007 sales comprised of 1,769 units of the Chevrolet Tavera, 1,621 units of the Chevrolet Aveo, 436 units of the Chevrolet Optra and 2,313 units of the Chevrolet Spark.

 
GMI has witnessed robust growth of 58 per cent during the period January-October 2007, selling 48,367 units as against 30,686 units sold in the corresponding of 2006.

Honda Siel Cars India (HSCI), manufacturer of premium cars in India, logged 5,287 units of sale in October 2007 as compared to 5,571 units during the same month previous year, witnessing a 5% decline. The company has been finding the going tough in the current year. Cumulative sales for the financial year 2007 (April-October) at 34,578 units as against 34,524 units during April-October 2006 have been flat. HSCI's model wise break-up for October 2007 is: City ZX - 3553; Civic - 1421; Accord - 188; CRV - 125.

Mahindra & Mahindra (M&M) continued its momentum of H1.F07, where it grew by 36% as against the industry growth rate of 3%. The company registered a 45.8% growth in October 2007 with total domestic sales of 23,578 units (including Logan, UVs, LCVs and 3-wheelers) as against 16,173 units in October 2006. Logan accounted for 2,701 units during the month, falling short of the expectation.

Total sales including exports for the month of October 2007 numbered 24,679 units as against 17,109 units in October 2006 - a growth of 44.2%. M&M exported 1,101 vehicles in October 2007 as against 936 vehicles in October 2006.

Utility Vehicles sales zoomed to 16,711 units in October 2007 as against 11,789 units a year back; LCVs sales rose to 817 units from 758 units in October2006; and sales of 3-Wheelers at 3,836 units as against 3,626 in October 2006, were up 5.8%.

Cumulative sales including exports of M&M in the current financial year up to October 2007 grew by 37.3% with total sales of 130,772 vehicles as against sales tally of 95,253 vehicles for the corresponding period last year.

Notwithstanding the high interest rates continuing to affect retails, Tata Motors managed to muster a sales tally of 49,354 vehicles (including exports) for the month of October 2007, a growth of 13% compared to 43,743 vehicles sold in October last year.

Tata Motors' Passenger Vehicle Business achieved total sales of 18,021 vehicles in the domestic market in October 2007, a growth of 8% over October 2006. The Indica with sales of 11,658 units was up 6% over October 2006. The Indigo family clocked sales of 2,353 units, a growth of 37% y-o-y. The Sumo and Safari accounted for sales of 4,010 units, remaining flat compared to October 2006. However, the new Safari Dicor 2.2 VTT launched in the month has received a very encouraging response. The sales figure of 1716 units during the month reflected a growth of 19.5% y-o-y for Safari.

CV sales of Tata Motors in October 2007 in the domestic market at 27,103 units, witnessed a growth of 16% compared to 23,354 vehicles sold in October last year. M&HCV sales stood at 13,980 units, up 6%, while LCV sales aggregating 13,123 units, clocked a growth of 29% over October 2006, and could have been better but for acute shortage of tyres.

The company's exports at 4,230 units in October 2007 grew by 16% over 3,663 units in October 2006.

Hero Honda Motors Ltd (HHML), the world's largest manufacturer of two-wheelers managed to nudge past the year-ago sales figure of 363,480 units by clocking sales of 365,022 units in October 2007. This works out to a measly 0.5% growth. While domestic sales at 359,315 units inched up by 0.8%, the exports at 5,707 units dropped by 19%. Bajaj Auto Ltd that has been witnessing severe slowdown in demand, turned in a somewhat improved performance with a single-digit de-growth at 7.5%. The company sold 206,870 two-wheelers in domestic market in October 2007 as against 223,691 two-wheelers a in the same month a year earlier. Exports aggregating 43,305 two-wheelers and growing at whopping 58% made good the fall in domestic sales. Cumulative sales tally (including exports) of 250,175 units for the month reflected a mere 0.4% drop.

The Bajaj XCD 125 DTS-Si launched on 9th September 2007 has sold almost 63,000 vehicles in the 6 weeks since, including almost 45,000 units in October 2007. In anticipation of this trend and with capacity of XCD 125 being expanded to 75,000 units/month from November 2007, Bajaj expects that its motorcycle sales will exhibit positive growth in the 2nd half of this fiscal.

Bajaj's domestic sales of 3-wheelers numbering 15,374 units in October 2007 as against 15,739 units in October 2006 were practically flat.

TVS Motor Company continued to be on a sticky wicket. The company's total two-wheeler sales adding up to 129,614 units in October 2007 was down 9% from 142,325 units in October 2006. During the month, the company's motorcycle sales clocked 67,752 units compared to 92,328 units recorded in October 2006, witnessing a steep 27% fall.

In the scooter segment, TVS Scooty continued to grow over last year posting 23% growth with 28,119 units in October 2007 vis-a-vis 22,836 units during the same month last year. The launch of TVS Scooty Teenz EV is expected to further strengthen this segment. The company's exports witnessed a quantum jump over the previous year with export figure of 11,046 units in October 2007, recording a growth of 53% over October 2006's figure of 7,232 units.

TVSM expects the sales to move upwards with the launch of TVS Flame that will strengthen the company's presence in the executive segment, which accounts for over 50% of the motorcycle market. The new product launches in various segments including the TVS Apache RTR EFI and TVS Scooty Teenz EV, which have been planned by the company are on course.

TVS Motor Company will also leverage the growth prospects of the three-wheeler market with the launch of its three-wheeler variants over the next couple of months.

As the festival season spills over to November 2007, there is an air of expectancy in the auto market. The scenario is expected to change for the better in the 2nd half of current financial year.