Two-Wheelers Unable to Fend Off Slowdown Bug

The month of January could not break loose from the pattern of sales performance in the previous months of the current fiscal. It was the same old story of passenger cars staying on the positive growth curve and all other segments of the industry, viz. 2-wheelers, 3-wheelers, and commercial vehicles witnessing deceleration in sales during the month. Stringent lending norms adopted by the banks and NBFCs for the financing of two-wheelers due rising delinquency, coupled with high interest regime, have put brakes on the growth of 2-wheelers that had been having an excellent run in the previous six years.

Passenger cars with domestic sales growth of 8.5% continued to move up on the sales chart during the month, thanks to the euphoria of new models. The growth numbers are not what the industry had bargained for before the start of the year, though.

Car market leader Maruti Suzuki India Limited sold a total of 68,107 vehicles in January 2008, including 4,648 export units, as against the sales tally of 65,341 units in January 2007. MSIL managed to record a paltry growth of 2% in domestic sales and 4% in total sales including exports during the month over the sales figures of January 2007.

Maruti's volume in the domestic A2 segment went up by 3 per cent, while in A3 segment, the domestic volume grew by 12 per cent, compared to January 2007. In C segment, the sales grew by 17% per cent during the month y-o-y.

Piggybacking the i10, Hyundai Motor India came up trumps, as its both domestic sales and exports zoomed by healthy 39% and 45.6%, respectively. HMIL sold 24,301 units in January 2008 in domestic market compared to 17,460 units in the corresponding month previous year. Exports during the month added up to 13,400 units.

Honda Siel Cars India (HSCI) also drove back to the growth path with a bang to record a handsome 29.2% growth in its domestic sales at 7,767 units in January 2008.

General Motors India stayed on a fast track with a robust growth of 46%, selling 5,517 units in January 2008 as against 3,776 units in January last year. The January 2008 sales comprised of 1,391 units of Chevrolet Tavera, 1,174 units of Chevrolet Aveo, 217 units of Chevrolet Optra, 2,639 units of Chevrolet Spark and 96 units of the recently launched Chevrolet Captiva.

 
Tata Motors reported a total sale of 54,796 vehicles (including exports) for the month of January 2008, nearly flat compared to 55,440 vehicles sold in January last year. The monthly sales - both domestic and total (including exports) - crossed the 50,000 mark for the first time this fiscal.

The Passenger Vehicle Business clocked total sales of 20,119 vehicles in the domestic market in January 2008, the highest during the fiscal with a previous average of 17,000 vehicle sales per month till December, but a decline of 11.8% vis-à-vis 22,801 units sold in January 2007. The Indica ended up with a sales count of 12,360 units, a decline of 14.6% y-o-y. The Indigo family registered sales of 2,901 units, sliding 9.5% from the January 2007 sales figure. The new Indica Dicor and the Indigo CS (Compact Sedan) launched in January have received an encouraging response, with production being ramped up. The Sumo and Safari accounted for sales of 4,858 units, a negative growth of 5% vis-à-vis January 2007. The Safari recorded a 23% growth over January 2007, with its highest ever sales of 2,550 units in a month.

The company's sales of commercial vehicles in January 2008 in the domestic market totaled 30,530 units, up 6% over 28,896 vehicles sold in January last year. M&HCV sales stood at 15,633 units, a decline of 8.6% y-o-y, while LCV sales at 14,897 units grew by 26% over January 2007.

TML's exports at 4,147 vehicles in January 2008 rose 11% compared to 3,743 vehicles in January 2007. The cumulative exports in the current fiscal at 44,410 units have recorded a growth of 6% over the previous year.

With domestic sales figure of 10,362 units in January 2008 as against 10,362 units in January 2007, Mahindra & Mahindra slipped into the negative terrain, recording a 3.7% dip during the month.

Ford India continued to be in reverse gear. The company was able to muster a sale of 2,613 units in the domestic market during the month of January 2008, down by a massive 44% from the domestic sales figure of 4,623 units recorded a year ago.

In keeping with the lacklustre CV market reeling under high interest regime and slowdown in manufacturing activity, Ashok Leyland was also on a downhill journey. The company skidded 7% to record domestic sale of 8,477 units in January 2008 as against 9,113 units in January 2007.

Two-Wheeler majors yet again found themselves on a sticky wicket during the month, as the market failed to stir out of its deep slumber.

Hero Honda, the largest two-wheeler manufacturer in the world could not beat the slowdown blues, as the company's domestic sales at 280,663 units in January 2008 chipped off by 2.2% from 286,963 units in January 2007.

Bajaj Auto yet again came up with a below-par performance in domestic market, clocking 135,804 units of two-wheeler sales in January 2008. This translates into a steep 22% fall from 173,410 units a year ago. However, the company carried on with a stellar performance in exports of two-wheelers, which grew by healthy 36% to 31,788 units in January 2008 from 23,343 units in the corresponding month last year.

Bajaj Auto's 3-wheeler domestic sales also slipped 17.4% from 15,561 units a year ago to 12,856 units in January 2008.

TVS Motor's poor run in the current fiscal was visible in January 2008 too. The company's two-wheeler domestic sales aggregating 80,277 units were down by massive 29.6%. The company's motorcycle sales at 38,961 units in comparison to 69,634 units recorded in January 2007 plunged 56.6%. TVSM can, however, take heart from the fact that its surge in exports to 13,108 units and rising by 86% y-o-y stayed on course during the month.

Over the course of the next two months, the company plans to launch several new products into the market including a new entry level StaR Sport to revive its fortunes in the face of restricted availability of retail finance, high rates of interest and stringent norms followed by financiers.

Bucking the trends and downbeat sentiment in two-wheeler market, Honda Motorcycle & Scooter India (HMSI) turned in a decent performance witnessing a growth of 9% at 74,460 units of domestic sales in January 2008. The exports at 3,270 units and rising by whopping 178% also came in handy for the company to post 11.6% cumulative growth during the month.

All the segments, barring passenger cars, are in a slowdown mode. Buoyed by the new offerings, passenger car market has been able to keep itself afloat. The moderation in economic growth, particularly in the manufacturing sector and the high interest regime have taken their toll especially on the two-wheeler and CV markets. The sale numbers in the current financial year are headed south.