Passenger Vehicles Stem the Slide

But Sparkle Missing in Festive Season

New launches and festive season discounts propped up the sales of passenger vehicles to some extent in the month of Sep’11. Passenger vehicles had been in the negative terrain for the past few months, hit badly by the increase in interest rates and petrol price hikes.

The September sales numbers of passenger vehicles acquired a modicum of respectability due to the robust demand for the diesel variants, while the petrol-driven passenger vehicles continued to witness the sluggish sales. The last few years have witnessed an increasing trend towards diesel-fuelled vehicles due to widening price differential between diesel and petrol. Domestic sales volumes of passenger vehicles posted a paltry 2% growth in Sep’11 at 2,18,170 units. The continuing labour unrest at Maruti Suzuki also contributed in spoiling the sales figure for passenger cars. However, exports of passenger vehicles recorded a decent 14% growth y-o-y during the month.

Total sales of vehicles across all categories registered a healthy growth of 19.40 per cent to 15,71,342 units in Sep'11 against 13,16,118 units in the same month last year, riding on the impressive sales performance of two-wheelers that continued to surprise and surpass forecasts. Two-Wheelers recorded a whopping 24% growth, selling 12,33,283 units during September 2011 in domestic market, compared to 9,92,383 units in September last year. The 2-wheeler exports too were in overdrive, clocking an impressive 45% increase y-o-y at 1,75,217 units during the month.

Commercial vehicle segment held steady, posting an 18% growth y-o-y in domestic sales at 70,634 units in Sep’11, with a hefty contribution coming in from Light Commercial Vehicles that grew by a healthy 35%. CV exports too recorded a 62% surge to 9,527 units in Sep'11.

Three-wheelers remained in low gear with a measly growth of 1% in domestic sales at 49,255 units during Sep'11. However, the exports of three-wheelers posted reasonably good numbers logging 31,581 units, which reflected a 47% rise y-o-y.

Maruti Suzuki India Ltd (MSIL) recorded total sales of 85,565 units, including exports, in Sep'11 as against 1,08,006 units during the same month last year. MSIL's domestic sales fell sharply to 78,816 units, reflecting a negative growth of 17.2% y-o-y.

The disruption in production owing to the labour unrest at the company's Manesar plant during September adversely impacted the sales numbers. Swift, SX4 and A-star are manufactured at the Manesar plant. The company's exports at 6,749 units too plunged by 47.5%.

Hyundai Motor India Ltd (HMIL), the second largest player in car market witnessed a 13.2% rise in its domestic sales to 35,955 units in Sep'11 from 31,751 units a year earlier. Exports also sustained momentum, growing by 11% to 21,867 units in Sep'11 from 19,690 units during Sep'10.

The segment-wise cumulative sales of HMIL during Sep'11 are as follows: A2 segment (Eon, Santro, MO, i20) -49,552 units; A3 Segment (Accent & Verna) - 8,051 units; A5 segment (Sonata Transform) - 7 units; and Santa Fe (SUV)-198 units.

Ford India that has been losing steam after creating initial euphoria with Figo and new Fiesta saw its domestic sales decline by 7% from 8,380 units in Sep'10 to 7,801 units during Sep'11. However, the company's exports at 2,469 units stayed on fast track with a handsome 146% growth y-o-y during the month.

Piggybacking on its new offerings - Etios and Etios Liva in volume segment, Toyota Kirloskar Motor registered a stupendous growth of 105%, doubling its sales numbers to 12,807 units in Sep'11 from 6,235 units in Sep'10. Sandeep Singh, Dy Managing Director, Marketing, TKM said, "We have registered a growth of 105 per cent in September sales. This growth can be attributed to the sales of Etios and Etios Liva clocking a total of 5,926 units. The flagship brand Innova along with Fortuner and Corolla has also contributed to this growth. This is a positive sign for us at the onset of the festive season."

 
Tata Motors Ltd turned things around, recording a positive growth in its passenger vehicle sales during September after witnessing free fall for some time. The company saw its total sales (including exports) of commercial and passenger vehicles rise by 22% y-o-y to 78,786 units in Sep'11.

Passenger Vehicle Business Unit of Tata Motors registered domestic sales of 26,319 units in Sep'11, higher by 10% vis-à-vis the same month last year. The Indica range sales increased to 10,282 units, growing by 64% during the month, while the domestic sales of Indigo range slipped 11% to 7,793 units. Significant numbers were contributed by Sumo/Safari/Aria/Venture range that recorded a growth of 60% y-o-y in domestic sales at 5,308 units during the month.

Tata Commercial Vehicles clocked a growth of 29% in domestic sales at 46,247 units, compared to 35,734 units a year ago. LCV sales of Tata Motors in domestic market during Sep'11 stood at 28,092 units, a rise of 47% over September last year, while M&HCV sales grew by 9% y-o-y to 18,155 units.

The second biggest CV maker, Ashok Leyland (ALL) could not come out of the slowdown mode, posting 22% drop in its domestic sales to 7,456 units during the month of Sep'11 from 9,512 units in Sep'10. The company's exports, however, remained robust soaring by 31 % y-o-y to 850 units during the month.

Total sales of Mahindra & Mahindra (M&M) at 40,168 units in domestic market during the month of Sep'11 recorded a 22.4% increase over 32,797 units a year earlier. Mahindra's passenger vehicles (including UVs and Verito) posted a growth of 11 % y-o-y in domestic sales to 19,447 units during the month.

Speaking on the numbers, Rajesh Jejurikar, Chief Executive, Automotive Division, M&M said, "We are delighted with the 28% growth that we have clocked for the first half of FY'12, and the record sales that we have clocked in September. We are also very excited with the initial response to our global SUV - XUV60o and hope to further consolidate our position in the SUV market with this launch."

Volkswagen India Pvt Ltd maintained the momentum, selling 6,847 units during Sep'11, which represented a healthy 47% growth year-on-year.

General Motors India (GMI) also moved up the growth curve with a 17% increase in its sales volume at 10,078 units during Sep'11 as against 8,591 units in Sep'10.

Honda Siel Cars India (HSCI) slipped back to the negative terrain, recording a sharp 38.4% decline in its domestic sales to 4,758 units in Sep'11 from the corresponding sales figure of 7,728 units a year ago. Model wise break-up of HSCI sales during the month of September 2011 was: Brio - 171 units; Jazz - 596 units; City - 3,720 units; Civic - 117 units; Accord - 137 units; and CR-V - 17 units.

Two-wheelers stayed in fast lane with the world's largest two-wheeler manufacturer and the market leader - Hero MotoCorp Ltd yet again crossing the 5-lakh-unit sales mark. Hero MotoCorp sold 5,49,625 units in domestic and overseas markets during the month of Sep'11, up 26.75% over the corresponding month last year, when it had sold 4,33,641 units.

Anil Dua, Sr Vice President (Marketing & Sales), Hero MotoCorp Ltd said, "We continue to progress on our growth trajectory this year and September sales have added a new milestone to our journey. Sales have been regularly in excess of half a million two-wheelers per month since the formation of our new company, setting the pace for our continued leadership. We expect this momentum to continue into the festive season, and our plans are in place to meet the market demand. Our customers can surely look forward to more added excitement in the festive season."

Bajaj Auto Ltd held steady with its domestic sales climbing up by 11% y-o-y to 2,55,786 units in Sep'11. Exports of Bajaj two-wheelers posted a healthy 38% growth to 1,15,422 units during the month.

TVS Motor recorded a 20.5% uptick in its domestic sales of two-wheelers at 1,82,737 units. The company's two-wheeler exports were also on course, registering a 23% growth y-o-y at 24,195 units.

India Yamaha Motor Pvt Ltd sold 32,637 units in domestic market during Sep'11 as against 24,133 units in Sep'10, which represented a robust growth of 35.2%. The export at 10,825 units were also up by 10.3% y-o-y during the month.

Other two-wheeler majors, viz. Suzuki India and HMSI also witnessed strong growth in their sales.

While passenger vehicle segment, aided by new offerings, freebies and discounts, has staged a comeback of sort with a moderate growth during the month of September, the fireworks are surely missing in the early part of this festival season so far as the growth in sales volumes is concerned. With RBI giving no indication of pressing pause button on increasing the key policy rates, uncertainty looms large over the horizon. Thankfully, two-wheelers being sold largely (70-80%) against cash are not affected adversely by the interest rate increase.