Rough Ride Continues

Propelled by Hero Honda, there was a robust growth in two-wheeler sales, which masked the glitches in automobile sales in domestic market during May'09 and pulled up the overall growth in terms of numbers to a respectable 8.6%. The growth was also aided by 3-wheeler sales that grew by 5.3%.

Other segments, namely commercial vehicles and passenger cars, were in the negative territory. While commercial vehicles remained stuck deep in the negative terrain with a negative growth of 14.8%, passenger vehicle sales in domestic market lost their way and were down by 0.8% due mainly to the unimpressive performance of utility vehicles that declined by 29.2%. The strike in M&M's Nashik plant also resulted in the dismal UV sale numbers.

Passenger vehicle sales figures for the month of May were made to look a tad respectable by the strong performance on export front and the uptick in the domestic sales numbers of Maruti Suzuki, Honda Siel Cars, Fiat India and Ford India. Rest of the car majors had not much to rave about. With economy and infrastructure development activity not showing any significant improvement, commercial vehicle market remained downbeat.

Leading the charge, car market leader Maruti Suzuki India Ltd sold a total of 79,872 vehicles in May'09, including 9,087 units for export, as against the corresponding sales figure of 69,001 vehicles in May'08. The company's domestic sales at 70,785 vehicles during the month of May'09 were up 10.4% over 64,143 vehicles sold in the same month last year. The exports aggregating 9,087 units zoomed by a healthy 87% from 4,858 units a year ago, helping the company to register an overall sales growth of 15.8%.

Maruti Suzuki's volume in the domestic A2 segment grew by 20.7 per cent, while in the A3 segment, its sales rose by 14.1 per cent y-o-y during the month.

Honda Siel Cars India (HSCI) reported a growth of 3.3% for the month of May'09 with sales of 4,073 units as against sales of 3,943 units in May'08. Honda City continued to do well as it sold an impressive 3,638 units in May'09 as against 2,375 units sold in the same month in the previous year, marking a growth of over 53%. The company sold a total of 7,729 units in the period Apr-May'09 as against 7,343 units sold in the corresponding period last year, which translates into a 5.25% growth.

While Fiat India stayed on course to clock a robust 155% growth notching up 1,175 units of sale in domestic market, Ford India's domestic sales a, 2,168 units increased by 8.2% during the month y-o-y. However, their combined numbers constituting a small base failed to make a significant difference in the overall growth of passenger vehicle segment in domestic market.

Riding high on the incentives provided by the government’s in different countries of the European Union, Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter saw a healthy growth of 27.8% in its exports for the month of May, 2009. The European Union led by major automotive markets like Germany, France, UK and Italy that had, of late, introduced incentives like the 'scrappage incentive' to induce sales resulted in a positive sales scenario for HMIL as it benefited mostly from its exports to Europe which continues to grow despite a slowdown in the sector.

 
However, HMIL's domestic sales standing at 23,503 units during May'09 as against 24,510 units last May, slipped by 4.1%. The exports that grew from 15,751 units in May'08 to 20,125 units in May'09, propped up the sales numbers for Hyundai Motor India. HMIL's total sales during May'09 at 43,628 units against 40,261 units in May 2008 enabled the company to end up with a growth of 8.4%.

The segment-wise cumulative sales of HMIL during the month of May'09 were as follows: A2 Segment (Santro, i10, Getz & i20) - 39,864 units; A3 Segment (Accent & Verna) - 3,735 units; A5 Segment (Sonata Transform) - 27 units; and SUV Segment (Tucson) - 2 units.

Troubled by the workers' strike and shutdown at Nashik plant, Mahindra & Mahindra witnessed a negative growth of 13.6% in its utility vehicle sales that added up to 8,033 units during the month of May'09. Logan stayed on a slippery ground with its sales during May'09 falling to 427 units from 1,531 units a year ago.

Tata Motors' domestic sales during the month of May'09 stood at 38,392 units, an 11% decline from 42,916 units sold in May'08. However, they were 6% higher compared to 36,257 units sold in the previous month of Apr'09.

The company's total sales (including exports) aggregated 40,196 vehicles, falling by 13% from 46,339 vehicles sold in May last year.

Passenger Vehicle Business Unit of Tata Motors reported a total sale of 15,388 passenger vehicles in the domestic market during May'09, compared to 19,234 passenger vehicles in May'08. The Indica range clocked sales of 10,006 units, a growth of 3% over May'08. May'09 was the fourth consecutive growth month for the Indica. The Indigo family's sales at 2,832 units were down by 37.6%, while the company's UV/SUV range accounting for sales of 2,550 units, slid steeply by 49% compared to May'08.

Tata Motors sold 23,004 units of commercial vehicles in May'09, a 3% decline from 23,682 vehicles sold in May last year, but about 1 % higher than Apr'09. LCV sales were 14,380 units, a growth of 20% over May 2008, while M&HCV sales aggregating 8,624 units plunged by 27% y-o-y.

TML's exports at 1,804 vehicles in May'09 declined by 47% compared to the export figure of 3,423 vehicles in May'08.

Another commercial vehicle major - Ashok Leyland continued to be afflicted by the slowdown blues. The company mustered domestic sales of 1,697 units in May'09, which represented a massive 67% fall from the sales figure of 5,161 units a year ago.

Hero Honda Motors Ltd (HHML), the world's largest two-wheeler manufacturer, keeps consolidating its market leadership. The company reported sales of 3,82,678 units in May'09 - its highest-ever sales for the month of May, which translates into a healthy 22.5 per cent growth over the corresponding Month in 2008, when it had sold 3,12,317 units.

The buoyant performance of May'09 came close on the heels of a 30 per cent growth in Hero Honda's April sales, when the company sold 3,70,575 units of two-wheelers. With this, Hero Honda's cumulative sales in the new financial year (Apr-May 2009-10) went up to 7,53,253 units, a growth of 25.8 per cent over 5,98,569 units sold during the corresponding period last year.

Hero Honda has been consistently building on its strong 58 per cent share in the domestic motorcycle market, even as the uncertainty over interest rates and an overall credit squeeze continues to impact the industry adversely.

Most of the new launches such as the Passion Pro, Splendor NXG self-start, the special edition Hunk, the new Pleasure, in addition to the trusted Splendor+ and Passion Plus, have been share-and-volume drivers for the company. Hunk and CBZ X-treme continue to help build on Hero Honda's steadily growing share in the premium segment.

Hero Honda bagged the "Trusted Brand" (Motorcycles) Award 2009 by Reader's Digest magazine in May.

TVS Motor Company posted a 5% growth in May'09, registering total two wheeler sales of 1,18,574 units against 1,12,770 units in the same month last year.

The company's domestic motorcycle sales for the month of May'09 were up 3% at 53,495 units, as compared to 54,717 units recorded in May'08. Scooter sales stood at 22,486 units in May'09 vis-a-vis 22,931 units recorded a year ago. The company is all set to strengthen its premium segment with the launch of the Apache RTR 180.

The ongoing economic slowdown took its toll on the company's exports, which added up to 11,135 units of two wheelers in May'09 as against 14,071 units in May'08.

Bajaj Auto remained in the negative territory with its domestic sales of two-wheelers falling by 12.9% to 114,122 units from 131,094 units a year ago. The company's exports of two-wheelers at 51,575 units, however, rose by 3.5% compared to the previous corresponding export figure of 49,841 two wheelers.

Auto market is in for tough times ahead unless credit crunch is eased and interest rates are lowered. While credit availability for passenger cars has improved, banks and NBFCs are still overcautious when it comes to financing commercial vehicles and two-wheelers. The industry is looking forward to further fiscal and monetary measures to help kickstart the demand.