The Year Ending Fails to Rev Up Vehicle Sales

The month of March, which normally witnesses the Increased pace of vehicle sales due largely to the depreciation benefit availed by the companies before the closure of financial year was not able to stir the auto market out of slowdown mode. However, the auto industry could draw comfort somewhat from the year-end results inasmuch as the adverse factors, namely, inflation, credit squeeze & rise in lending rates and slowdown in manufacturing sector as well as economy in general did not weigh it down to a significant extent. The market managed to stage a recovery to some extent in the latter half of FY'08. While passenger cars & utility vehicles maintained their double-digit growth year-on-year in March 2008, the commercial vehicles stayed on comeback trail with reasonably good sales numbers. 2-wheelers and 3-wheelers however, could not come out of the rut they have got into since the beginning of FY'08.

Car market leader, Maruti Suzuki India Ltd (MSIL) saw its sales dipping by 2% in March 2008 in spite of Dzire, the company's new offering replacing Esteem, making up good numbers. The highlight in March was the enthusiastic response to the company's latest model, DZire, which was launched on March 26, 2008. The company despatched 5,658 units of DZire during the month.

 
This, however, is not an indication that monthly sales of DZire will be maintained at this level. Like with all new models, the initial sales dispatches are higher than normal as they include cars for customer test drives and for display at showrooms. Besides, the novelty factor also contributes to higher than usual sales in the initial days.

MSIL sold 64,421 units in the domestic market during March 2008 as against 64,556 units in the corresponding month last year. The company's exports also saw a sharp drop in numbers from 7,216 units in March 2007 to 5,875 units in March 2008. Having already attained the export target for the year, the company attributed the fall in exports during the month to the high base of March 2007. MSIL was in the negative terrain in A 1, A2 and C segments. Dzire despatches came to the company's help for its impressive performance in A3 segment.

Maruti Suzuki registered sales of 764,842 vehicies in 2007-08, the highest ever in the history of the company. This marked a growth of 13.3 per cent over the previous year. The company's sales included exports of 53,024 during 2007-08, the highest ever in the company's history. Exports grew by 34.9 per cent during the year.

While strengthening its position in the A2 segment, Maruti Suzuki sold 49,335 cars in the A3 segment, a whopping growth of 66.1 per cent over the previous year.

Hyundai Motor India Ltd (HMIL), the country's second largest car manufacturer and the largest passenger car exporter, came up with a record sales during the month of March, 2008, notching up an overall growth of 66.4% in March, 2008 over the same month last year. While the domestic sales grew by 52.3%, the exports zoomed by 96.9% over March, 2007.

HMIL's total sales during the month stood at 47,001 units, of which the domestic market accounted for 29,401 units and exports totaled 17,600 units. The cumulative sales in March last year had aggregated 28,239 units comprising domestic sales at 19,300 units and exports at 8,939 units.

The segment-wise cumulative sales of Hyundai Motor India in the month of March, 2008 are as follows: A1 Segment - 41,259 units; A2 Segment - 5,690 units; A3 Segment - 10 units; A4 Segment - 37 units; and SUV Segment - 5 units.

The last quarter beginning January 2008 was markedly good for HMIL. While domestic sales aggregating 68,302 units grew by 31 %, exports totaling 45,400 units rose by 64% over the corresponding quarter last year.

Commenting on the record sales, H S Lheem, Managing Director, HMIL said, "We are absolutely delighted by our sales touching an all time high and we believe it shows the strength of the Hyundai brand. The newly launched compact i1 0 has done phenomenally well and is on its way to becoming a very popular car."

Riding on Chevrolet Spark, General Motors India (GMI) clocked of 6,836 units of sales in March 2008, growing by 50.5% over 4,542 units in March 2007.

Ford India's domestic sales at 3,260 units during the month slipped by a massive 39% y-o-y.

Clocking 8,895 units of domestic sales, Honda Siel Cars India (HSCI) grew by 5% over 8,487 units in March 2007.

Mahindra & Mahindra (M&M) witnessed drop in domestic sales of its utility vehicles by 2.6% to 10,958 units from 11,250 units a year ago. However, exports made good the slight dip in domestic sale numbers and enabled the company to end up with an overall growth of 1 % during the month y-o-y.

Commercial Vehicle sales of M&M in domestic market adding up to 5,499 units in March 2008 rose by 10.6% and cumulative sales including exports by 14.4% over the sales tally of March 2007.

In keeping with the trends of the financial year, M&M's 3-wheeler sales in domestic market at 3,603 units during the month skidded 1.2%. Again, the export of 3-wheelers during the month helped the company record a paltry growth of 1.5% in March 2008 y-o-y.

Renault Logan clocked 3,068 units during the month.

Tata Motors reported a record sale of 582,401 vehicles (including exports) for the fiscal year 2007 -08, its highest ever and a growth of 1 % over 578,862 vehicles sold in 2006-07. Total sales (including exports) during the month of March 2008 totaled 66,495 vehicles, the company's highest ever monthly sales and an increase of 6% over 62,779 vehicles sold in March 2007.

TML's sales of commercial vehicles in March 2008 in the domestic market added up to 35,993 units, up 17% over 30,720 vehicles sold in March last year. M&HCV sales stood at 20,639 units, which translates into an increase of 17% y-o-y. LCV sales of the company at 15,354 units reflected a growth of 18%.

Cumulative sales of commercial vehicles of Tata Motors in the domestic market during the FY'08 added up to 313,371 units, an increase of 5% over last year.

Tata Motors' Passenger Vehicle Business witnessed total sales of 24,737 units in the domestic market in March 2008, its highest this fiscal but a decline of 4% from 25,760 vehicles sold in March last year. The Indica sold 13,042 units, sliding by 14.7% compared to March 2007. The Indigo family registered sales of 5,135, units up 18% over March 2007. This was incidentally the company's highest ever sales figure for the Indigo family. Utility Vehicles sales at 6,560 units witnessed a growth of 7.4%.

Cumulative sales of passenger vehicles of Tata Motors in the domestic market during the financial year stood at 214,758 units, which represented a 5% decline from the previous year's figure. The Sumo and Safari sold 47,700 units in the fiscal, remaining flat.

 
The company exported 5,765 vehicles in March 2008 as compared to 6,299 vehicles in March last year, witnessing a drop of 8.5%. The cumulative exports during the year totaled 54,272 units, climbing up 3% over 52,796 vehicles exported during the year 2006-07.

Ashok Leyland Ltd (ALL) came up with a healthy growth of 20.3% in its domestic sales of 9,542 commercial vehicles in March 2008 vis-à-vis the corresponding sales figure of 7,929 commercial vehicles a year ago. Exports also contributed for the company to end up on a high note with a growth of 26.8% y-o-y during March 2008.

ALL closed the year ended 31st March 2008 with an all-time high sale of 83,309 vehicles. Domestic sales in the M&HCV segment at 76,023 units witnessed a small dip. Export volumes aggregating 7,286 units were, however, up 21%.

Two-Wheelers and Three-Wheelers stayed on a sticky wicket. 3-wheelers' sales including exports totaling 40,223 units skidded 10% y-o-y in March 2008. However, healthy exports aided the two-wheelers to finish with a growth of 3% during the month. Total sales of two-wheelers during the FY 2007-08 at 8,068,447 units reflected a de-growth of 5%.

Bucking the industry trends, Hero Honda notched up cumulative sales of 320,594 units in March 2008, up 15.4% over 277,915 units in March 2007.

Honda Motorcycle & Scooter India (HMSI) selling 80,014 two-wheelers in domestic and export markets also clocked a growth of 5% y-o-y during the month.

Two other two-wheeler majors, viz. Bajaj Auto and TVS Motor Company remained in the negative terrain with their sales falling by 8-9% during the month.

Although the auto industry and the retail trade, as also the experts, are optimistic on the outlook for the FY 2008-09, there is a need to exercise caution with inflation, credit squeeze and volatile fuel prices looming over the horizon.