Auto Market Fails to Ward Off the Slowdown Bug

The month of September was no different from the earlier five months of this financial year. Auto sales during the month displayed by now the familiar pattern of passenger cars staying on growth path largely driven by the new models, while other segments, viz. two/three wheelers and commercial vehicles had not much to write home about. The new launches in two-wheeler segment are yet to show any significant impact. In all, the industry recorded a negative growth of 10% in terms of numbers in the domestic market with passenger car segment saving it from blushes to some extent with a positive growth of 10%.

Car market leader Maruti Suzuki India Ltd once again stole the limelight with a domestic sales figure of 63,086 vehicles in September 2007 as against 56,606 vehicles in September 2006, which translates into a growth of 11.4%. The company's total sales volume, including export of 4,362 units, rose by 13.5% to 67,448 units from 59,420 units a year ago.

Maruti’s volume in the domestic A2 segment went up by 21.8 per cent while in the A3 segment the volume grew by 43.3 per cent during the month compared to sales in September 2006.

Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, registered a fairly decent growth in the month of September 2007, as it recorded a 9.7% increase in its domestic vehicle sales over September 2006. The total sales stood at 27,514 units (domestic sales at 18,009 units and exports at 9,505 units) in September 2007 vis-à-vis 26,491 units a year back, growing 3.9% y-o-y.

HMIL's segment-wise cumulative sales in the month of September 2007 are as follows: A1 Segment - 23,057 units; A2 Segment - 4,402 units; A3 Segment - 3 units; A4 Segment - 36 units; and SUV Segment - 16 units.

General Motors India clocked an impressive growth of 64% selling 5,751 units in September 2007 as against 3,506 units in September last year. The September 2007 sales comprised of 1,953 units of Chevrolet Tavera, 1,559 units of Chevrolet Aveo, 738 units of Chevrolet Optra and 1,501 units of Chevrolet Spark.

The launch of feature-rich upgrade of Honda City did not weave magic for Honda Siel Cars India (HSCI) with the company's sale numbers declining by 5% to 5,674 units in September 2007 from 5,993 units during the same month previous year. Model-wise sales break-up for HSCI during September 2007 was: City ZX - 3,635; Civic -1,392; Accord - 245; CRV - 402. As for the company's showing in the first six months of the current financial year, the sales at 29,291 units have more or less remained flat as against 28,953 units sold in April-September 2006.

 
Ford India Ltd saw its domestic sales at 3,552 units in September 2007 sliding by 16.6% from 4,260 units a year ago.

Tata Motors Ltd reported a total sale of 48,347 vehicles (including exports) for the month of September 2007, nearly flat compared to 48,963 vehicles sold in September last year. Cumulative sales during April-September 2007 for the company at 262,950 units were also flat. The domestic market continued to be sluggish with high interest rate regime continuing to affect retails.

TML's Passenger Vehicle Business witnessed domestic sales of 17,006 vehicles in September 2007, a decline of 8.6% compared to September 2006. The Indica reported sales of 11,376 units, up 6.4% y-o-y. The Indigo family clocked 2,328 units witnessing a steep fall of 34.8%. The Sumo and Safari accounted for sales of 3,302 units, a decline of 24% y-o-y. Cumulative sales of passenger vehicles in the domestic market for the fiscal were nearly flat at 102,477 units.

The company's sales of commercial vehicles in September 2007 in the domestic market aggregating 27,036 units were virtually stagnant compared to 26,627 vehicles sold in September last year. M&HCV sales stood at 14,129 units, a decline of 7%, while LCV sales at 12,907 units rose by 13% over the September 2006 sales figure. Domestic sales volume for commercial vehicles during the six months of current fiscal totalling 1,32,871 units, remained flat with M&HCV sales at 68,776 units declining by 11 % and cumulative LCV sales volume at 64,095 units growing by 13% y-o-y.

The company's exports at 4,305 units in September 2007 grew by 16% as compared to 3,727 units in September 2006. The cumulative exports in the current financial year at 27,602 units were up 3% over the corresponding period of previous year.

Ashok Leyland Ltd was also in the negative terrain with its volumes, including exports, slipping by 11.0% from 8,155 units in September 2006 to 7,263 units in September 2007.

Mahindra & Mahindra Ltd witnessing 8,332 units of its UV sales during the month in the domestic market, grew by 10% compared to the domestic sales figure of 7,585 units in September 2006. Logan, on the other hand, clocked 2,184 units in September.

Hero Honda Motors Ltd volumes came in strong growing by 5% y-o-y following 12% growth in August. Overall volumes came in at 315K units vs 302K units in September 2006. However, given Hero Honda's record monthly sales in October last year (360K units), the company has a daunting task to maintain its growth track record during the remainder of the year, particularly in the face of increased competitive activity - Bajaj Auto's XCD 125 and TVS Motors' product launches over the next few months.

Bajaj Auto Ltd continued to be on a slippery ground as its overall two-wheeler volumes (including exports) declined by 24% to 206K units in September 2007 from 272K units a year ago. The company's domestic sales at 169K units (246.7K units) were down by whopping 31.5%. Three wheeler sales came in at 26K units roughly 6% below last year's 27.8K units. Exports of 2-wheelers & 3-wheelers at 48K units were up 30% y-o-y.

The company indicated that the new model XCD 125cc was successfully rolled out during the month and posted sales of 18K units, with 55% brand conquests and 10% from new customers. The company also increased its production target in October to 50K units from 40K and is expanding capacity for XCD to 75K units per month.

TVS Motor Company Ltd continued to slide with its sales of two-wheelers (including exports) falling 29% y-o-y to 116K units in September 2007 from 162K units in September 2006. The company's domestic sales at 102K units vis-a-vis 152K units a year back plummeted by massive 33%. The company's scooter volumes at 27.2K units (24.9K units) and moped volumes at 33.9K units (30:3K units) stayed on course during the month.

TVS Motor is banking on the launch of TVS Flame, which is expected to strengthen the company's presence in the executive segment and to boost its dwindling sales of motorcycles, which nose-dived to 54K units compared to 107K units recorded in September 2006. The 110cc TVS StaR City will also be available during the upcoming festival season and will give sales a further thrust, along with the upgraded TVS Apache RTR with 160cc engine launched recently. TVS is also counting on the ensuing festival season and cut in lending rates by the banks to get customers back to its sales showrooms.

Honda Motorcycle & Scooter India Ltd continued to climb up the growth chart to record a stupendous 63% growth aided by the burgeoning market for its scooters. Overall volumes, including exports, aggregated 80K units in September 2007 vs 49K units in the corresponding month last year.

Automobile industry is banking heavily on the festival season, which coupled with new launches and lowering of interest rates by banks, is expected to bring the automobile market back on growth track.