Auto Sales Slide Deep into Negative Territory

The month of November saw vehicle sales tumble down the growth curve like never before and cause mayhem in the auto market. The deepening slowdown was all-pervasive and dented all segments of auto market. Commercial vehicles were the worst-hit, their sales plummeting by 50% in November 2008. Other segments also witnessed a sharp downtrend in sales. While passenger vehicle domestic sales were down by 24%, 3-wheeler and 2-wheelers plunged 23% and 18%, respectively, during the month. The industry sold 7.11 lakh vehicles in November as against 8.67 lakh vehicles in the same month last year. The slowdown has forced automakers to cut production to adjust with the market conditions.

Car market leader, Maruti Suzuki recording domestic sales of 47,704 cars declined by 27% in November 2008 from the corresponding sales figure of 65,216 cars in the same month last year. The company clocked an 11.7% growth in exports at 5,007 units to end up with negative growth of 24.4% in its cumulative sales during the month.

Hyundai Motor India Ltd (HMIL) registered an overall growth of 49% in November 2008. While the company's domestic sales dipped by 23.3% and exports surged 188% y-o-y during the month.

HMIL's total sales stood at 43,105 units. The domestic market accounted for 14,605 units, compared to 19,052 units in November 2007. The exports totaled 28,500 units in November 2008 vis-à-vis exports tally of 9,898 units in the same month last year.

Segment-wise cumulative sales of HMIL in the month of June, 2008 are as follows: A2 Segment (Santro, i10, Getz & i20) - 38,216 units; A3 Segment (Accent & Verna) - 4,883 units; units, A5 Segment (Sonata Embera) - 2 units; and SUV Segment (Tucson) 4 units.

With November sales at 4,307 units, General Motors India was also on a skiddy road. GMI was down 20% from the sales figure of 5,356 units recorded a year ago.

Tata Motors reported total sales of 32,696 vehicles (including exports) in the month of November 2008, reflecting a 30% decline compared to 46,947 vehicles sold in November 2007. Cumulative (YTD) sales of the company at 338,110 units have fallen by 6%.

 
Tata Motor's commercial vehicle sales during November 2008 in the domestic market added up to 16,229 units, down 40% from 26,895 units sold in November last year. M&HCV sales stood at 5,792 units, nose-diving 60%, while LCV sales at 10,437 units, dropped 16% y-o-y.

The company's sales of passenger vehicles in November 2008 in the domestic market stood at 14,327 units, chipping off 12% from 16,322 vehicles sold in November last year. The Indica range sales at 9,039 units declined by 13.8% despite orders in hand, which the company said, could not be converted into sales due to lack of financing in the market, but held close to October 2008 level of 9,484 units. The Indigo range with sales of 3,477 units, reported a 73% growth over November 2007. Car sales of 12,516 units between the Indica and the Indigo range in the month of November 2008 are marginally up, compared to car sales of 12,502 units in November 2007, continuing the growth uptrend witnessed for the first time this fiscal in October 2008. The Sumo and Safari accounted for sales of 1,811 units, a drop of 52.6% compared to November 2007. The UV/SUV segment in the industry continues to be 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.

Cumulative passenger vehicle sales numbers (April-November) of Tata Motors in domestic market add up to 1,29,246 units, down 5.5% from 1,36,820 units in the same period last year.

In keeping with the market trends, Mahindra & Mahindra found itself in the negative terrain. The company's domestic UV sales at 5,095 units slumped by 41 %. M&M saw its sales slipping in CV and 3-wheeler markets as well. While its commercial vehicle sales ended up with a negative growth of 44%, 3-wheelers were down by 18% y-o-y during the month.

Ford India halted the slide in its sales with a paltry growth of 2.6% with its sales aggregating 2,219 units in November 2008 compared with 2,162 units in November 2007.

Riding on the recent rollout of new Honda City, Honda Siel Cars India (HSCI) finished with sales of 5,095 cars during the month of November 2008 to notch up a growth of 15% y-o-y.

The economic slowdown coupled with credit squeeze and high interest rates cast its shadow on the two-wheeler segment as well. However, Hero Honda and its sibling Honda Motorcycle and Scooter India scraped through unscathed in the wobbly market.

Hero Honda managed to shrug off the slowdown bug with its domestic sales during the month of November 2008 at 281,659 units ending up flat on the curve.

HMSI beat the adverse market conditions to clock domestic sales of 94,222 units in November 2008 vis-à-vis 69,659 units in November 2007. HMSI not only notched up a healthy growth of 35% but also pipped Bajaj Auto and TVS Motor Company to finish the second in the pecking order of domestic two-wheeler market during the month.

Bajaj Auto continued to ride on a bumpy road with its domestic sales of two-wheelers totaling 82,919 units falling sharply by 53%. However, the company exports at 49,502 units and rising by robust 41% y-o-y stayed on high growth trajectory. Bajaj Auto grew by 13% in its cumulative sales (domestic + exports) of 3-wheelers in November 2008, thanks to whopping 59% growth in its exports.

Another two-wheeler major, TVS Motor Company could muster sales of 77,491 two-wheelers in domestic market during the month, which translate into a negative growth of 24% compared to domestic sales of 102,358 two-wheelers in November last year. The company's exports 20,911 units were, however, on course to record a massive 111 % growth y-o-y.

Stimulus package including 4% excise duty cut should help increase footfalls at the retail outlets and revive slackening sales over a period of time. However, concomitant measures, such as availability of retail finance and lower interests, which are yet to percolate down to the retail market with banks still wary of easing lending norms, are important for early revival of auto market. Slowdown in economic activity and uncertainty in job market are also making customers defer their purchases. Auto market is likely to remain sluggish for some more time.